Hertz says it will fall short of 2014 guidance because of a variety of problems; stock falls

Associated Press

Rental car company Hertz on Tuesday said it was withdrawing its annual profit guidance because of "operational challenges" posed by auto recalls, an accounting review and other problems.

Shares of Hertz Global Holdings Inc. lost $3.66, or 11.6 percent, to $27.90 in aftermarket trading.

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The Park Ridge, New Jersey, company had forecast an annual profit of $1.70 to $2 per share in March, and said revenue would be between $11.4 billion and $11.7 billion. It said Tuesday that it now expects that its results will be "well below" the low end of those estimates.

The company said record levels of auto recalls have affected the availability of rental vehicles in the U.S., and it said operating expenses in that business were significantly higher than expected. The company also said it isn't saving as much money as it expected from its acquisition of former competitor Dollar Thrifty. It is also experiencing weak demand for business-equipment rentals.

In June, the company said it needed to review and correct financial statements from the last three years because an audit had uncovered accounting errors. Earlier this month, Hertz delayed filing its second-quarter results because of that review.

The company operates the Hertz, Dollar, Thrifty and Firefly rental car businesses, as well as fleet leasing and management services company Donlen. Hertz said in March that it would spin of the equipment rental unit into a separate publicly traded company.