Hertz shares get a boost from strong outlook
NEW YORK (AP) — Shares of Hertz Global Holdings Inc. jumped to their highest price in more than five years after the company offered a 2015 profit outlook well above Wall Street expectations.
THE SPARK: Hertz told an analysts' conference Tuesday that it expects to post an adjusted 2015 profit of $3.10 to $3.30 per share. Analysts, on average, expected $2.53 per share, according to FactSet.
Hertz also said it sees revenue growing at a compounded annual rate of 12.5 percent to 13.5 percent through 2015. The company previously projected annual growth between 7 percent and 8 percent 2011 through 2014.
THE BIG PICTURE: In February Hertz announced a $34.6 million fourth-quarter loss, mainly due to costs related to its acquisition of Dollar Thrifty. Hertz, based in Park Ridge, N.J., said pricing and rental volume improved during the first quarter, and it expects additional cost savings from the Dollar Thrifty acquisition this year.
Competition in the car-rental business kept companies like Hertz from raising prices, which dragged on revenue. Now, consolidation means fewer big competitors and more chance of higher rates.
THE SHARES: Up $1.59, or 7.3 percent, to $23.50 in heavy afternoon trading, after rising to $24.01 earlier in the session. That's the highest price since fall of 2007.