Shares of Dollar Thrifty (NYSE:DTG) tumbled more than 7% Monday morning after the car renter revealed a virtually flat second-quarter profit that disappointed Wall Street on flat fleet revenue.
The Tulsa, Okla.-based operator of car rental and leasing stores posted net income of $42.5 million, or $1.47 a share, up slightly from $42.3 million, or $1.48 a share.
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Excluding one-time items, the company, which has been the target of a takeover bid war between Hertz (NYSE:HTZ) and Avis Budget (NYSE:CAR), earned $1.35 a share, just below average analyst estimates polled by Thomson Reuters of $1.37.
Revenue for the three months ended June 30 was $395.13 million, down from $396.23 million a year ago, missing the Streets view of $408.6 million.
While we were pleased with our continued rental day growth during the quarter, the rate per day environment was a headwind, negatively impacting top line revenue growth, Dollar Thrifty CEO Scott Thompson said in a statement.
Vehicle rental revenue was unchanged from the prior year, however the companys ongoing efforts to maintain competitive fleet costs and control operating expenses allowed Dollar Thrifty to generate improved earnings in a less favorable environment, Thompson said.
The modest growth was also partially offset by lower fleet costs per vehicle, which was just $188 a month compared with 193 a month last year.
While the company expects the very robust vehicle market to continue trending upward through the remainder of the year, it said an expected decline in the used car market led it to cut its fleet cost outlook to a range of $215 to $225 a share.
The can renter warned that if the rate environment continues to remain under pressure, combined with single-digit rental day growth, Dollar Thriftys 2011 revenues would fall in line with those in 2010.