Standard & Poor's Ratings Services on Dec. 29 lowered the long-term corporate credit rating of Tulsa, Okla. rental car company Dollar Thrifty Automotive Group Inc. to "CCC+" from "B-", its second ratings drop of the company in two months.
Standard & Poor's said Dollar Thrifty, which employs about 700 people in Tulsa and 7,000 worldwide, remains on Creditwatch with negative implications, on which S&P placed the company on Feb. 12.
The Tulsa company has been hit by the downturn in corporate and leisure travel, surplus capacity in the rental car industry that has led to weak pricing and lower resale value of its used cars.
In the third quarter, Dollar Thrifty had earnings of $18.9 million, a 67 percent increase over 2007 third-quarter earnings of $11.3 million. Revenue in the third quarter was $500.6 million, a 4 percent decline from the same quarter last year.
Due to the uncertainty of the economy, the domestic automotive and airline industries and the used vehicle and financial markets, Dollar Thrifty executives said they expect to report a fourth-quarter pre-tax loss significantly greater than the $30.58 million fourth-quarter loss in 2007. The company also expects to post a 2008 pre-tax loss, company executives said.
In order to cut costs and realign its work force in a declining economy, Dollar Thrifty laid off 400 people in October.