Hertz Global Holdings Inc. announced guidance for second quarter and full-year 2009 revenues, Corporate EBITDA, adjusted pre-tax income and adjusted diluted earnings per share.
For the second quarter 2009, the company forecasts worldwide revenues in the range of $1.70 to $1.75 billion, Corporate EBITDA in the range of $260 million to $270 million, adjusted pre-tax income in the range of $65 to $70 million and adjusted diluted earnings per share in the range of $0.09 to $0.10. For the full-year 2009, the company forecasts worldwide revenues in the range of $6.7 to $7.0 billion, Corporate EBITDA in the range of $900 million to $935 million, adjusted pre-tax income in the range of $100 to $120 million and adjusted diluted earnings per share in the range of $0.12 to $0.15.
Mark P. Frissora, the company’s chairman and CEO, said, “We are able to resume earnings guidance for the current quarter and full year for several reasons. Our car rental demand in the U.S. and Europe has stabilized and we are experiencing better-than-anticipated summer peak reservation build in both markets. We are adding fleet as a result. Additionally, we anticipate no significant long-term financial impact from the GM and Chrysler bankruptcies, and we are increasing our estimate of incremental, annualized cost savings in 2009 by $70 million, to $570 million. These positive developments are offset partially by further, modest weakening in equipment rental demand and pricing, although we believe HERC will continue to generate strong Corporate EBITDA throughout the year.”
The company cited the following data as leading indicators of improving performance, compared with the fourth quarter of 2008 and the first quarter of 2009:
- We forecast U.S. car rental transaction days will improve year-over-year to (11.4 percent) in the second quarter, compared with (13.4 percent) in the first quarter. The company forecasts a single-digit transaction day decrease in Q3. Similar trends are expected in Europe.
- Our car rental reservation build in the U.S. has improved for nine consecutive weeks and for seven consecutive weeks in our European car rental market. At this time, our reservation build in Europe is positive, year-over-year, for July and August.
- Our average car rental fleets for Q2 are forecasted to be 14.6 percent lower year-over-year in the U.S. and 17.3 percent lower in Europe. We believe that our car rental fleet levels are aligned with demand due to fleet efficiency improvements.
- Our U.S. fleet utilization is forecasted to improve, year-over-year, 320 bps to 73 percent in Q2 and European fleet utilization is forecasted to improve 330 bps to 72 percent. The Company forecasts additional, significant utilization improvements in Q3 and for full year 2009, compared with the same periods last year.
- Our worldwide equipment rental business is expected to generate Q2 Corporate EBITDA exceeding $100 million. The company continues to expect the Corporate EBITDA margin of the equipment rental business will exceed 40 percent for Q2 and full year 2009.
The company will update annual guidance on a quarterly basis consistent with past practice. Additional details regarding Hertz's revenue, Corporate EBITDA, adjusted pre-tax income and adjusted diluted earnings per share guidance will be provided during the company’s investor presentation webcast scheduled for 1:30 p.m. (EDT) this afternoon, June 25, 2009, which can be accessed from the Investor Relations section of the company’s Web site, www.hertz.com/investorrelations, and on the company’s second quarter 2009 earnings conference call currently scheduled for July 29, 2009.