Dollar Thrifty (DTG) more than doubled its first-quarter profit and topped Wall Street expectations on Wednesday, as a decline in fleet costs and recovery in the U.S. leisure travel market helped offset weaker revenue per vehicle.
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Revenue for the three months ended March 31 was $356.27 million, up from $348.35 million a year ago, matching the Street’s view. The gains were led by a 6.5% increase in rental days, partially offset by a 4.2% decline in revenue per day.
Sales per car fell to $1,115 compared with $1,131 a year ago, but were partially offset by a decline to $136 from $251 in fleet costs per vehicle.
The Tulsa, Okla.-based car renter, which was the object of a lengthy takeover battle between rivals Hertz Global (HTZ) and Avis Budget (CAR) that ended in October, reported net income of $40.4 million, or $1.35 a share, compared with a year-earlier $16.5 million, or 53 cents. Analysts in a Thomson Reuters poll were looking for a per-share profit of just $1.30.
"A strong used car market, combined with continued emphasis in the areas of cost control, productivity initiatives, fleet utilization and balance sheet management enabled us to achieve another record quarter, in spite of a competitive rate environment,” Dollar Thrifty CEO Scott Thompson said in a statement.
Looking ahead, Dollar Thrifty revised higher its earnings in the range of $5 to $5.60 a share, which brackets average estimates of $5.36. It attributed the upbeat forecast to continued strength in the used-car market and improved travel volumes.