Hertz Global Holdings (HTZ) lowered its full-year outlook amid weak volume at its U.S. airport car rental business, sending shares in reverse Thursday.
The Park Ridge, N.J.-based company now sees adjusted per-share earnings of $1.68 to $1.78, a 10-cent cut on both ends, based on 465 million outstanding shares. Hertz also expects revenue of $10.8 billion to $10.9 billion, compared to its earlier view of $10.85 billion to $10.95 billion.
Shares tumbled 11.1% to $22.92 in early morning trading. As of Wednesday’s close, the stock has climbed 58.4% on the year. The news also pushed shares of Avis Budget Group (CAR) 6.8% lower to $28.04.
“Weaker volume impacts not only revenues, but also generates related fleet issues, including lower utilization and the inability of the used car market to absorb our excess vehicles at current market prices,” Chairman and Chief Executive Mark Frissora said in a statement. “Fortunately, stronger pricing in the U.S. airport car rental market is helping to partially offset softer volume.”
Frissora also noted Hertz’s European rental business has made “significant progress throughout 2013, overcoming the protracted recession in that market.”
Hertz has recently logged stronger revenue, thanks to a rebound in business and leisure travel and its acquisition of Dollar Thrifty Automotive Group. The second-largest U.S. car rental company reported in July a 31% increase in its second-quarter profit along with double-digit revenue growth.