TULSA, Okla. --- Dollar Thrifty Automotive Group reported that second-quarter revenue totaled $367.7 million, a 3.6% increase over the 2004 second quarter. But net income was down 25 cents per diluted share.

Net income for the quarter was $11.3 million, or 43 cents per diluted share. For the second quarter last year, net income was $17.9 million, or 68 cents per diluted share.

For the first six months of 2005, total revenue was $710.5 million, an 8.7% increase over the first half of 2004. Net income for the six-month period was $24.3 million.

Vehicle rental revenue rose 5.8%, reaching $335.6 million for the 2005 second quarter. Total rental day growth was 8.8%, driven mostly by franchise acquisitions.

Same-store rental days grew by 0.5%, DTG reported. Revenue per day dropped 2.7% during the quarter, primarily because of tighter competition.

"Second-quarter results reflected highly competitive industry conditions and the transitional impact of changes to our Internet reservation strategy," said Gary L. Paxton, president and CEO of Dollar Thrifty. "We benefited from the continued strong used car market allowing us to lower our vehicle costs, but we fell short of our rental day volume expectations and were challenged by competitive industry pricing. In addition, we were impacted by our previously announced change to non-preferred status with Expedia and the year-over-year impact of the shift of Easter from April last year to March of this year."

Dollar Thrifty this spring downgraded its positioning on Expedia, opting for non-preferred status. That decision has freed the company to offer lower rates on its own Web sites.

"Since changing our Expedia relationship effective May 1, we have made significant progress in increasing the number of reservations from our lower-cost channels, particularly our two branded Web sites, dollar.com and thrifty.com," Paxton said. "Our decision to move to non-preferred status on Expedia is the right long-term decision for our two brands despite the short-term effects."

During the second quarter, DTG purchased 288,400 shares under its $100 million share repurchase program at a total cost of $10 million. Since announcing the program in July 2003, DTG has purchased 1.5 million shares at a cost of $44.1 million.

Paxton predicted solid third-quarter numbers. "Based on early trends, we expect the company will have stronger performance in the third quarter for rental day growth, revenue-per-day trends and vehicle utilization than we achieved in the second quarter," he said.

Nonetheless, the company is adjusting its performance forecast for 2005.

"Including our second-quarter results, we are lowering our expectation for full-year 2005 same-store rental day growth to a range of 2% to 4%, and lowering our expectation for revenue per day to be about flat with last year," Paxton said. "We are lowering our 2005 earnings-per-share guidance to our original range of $2.00 to $2.20."

Industry fleet costs are expected to climb during the fourth quarter and during 2006, as vehicle manufacturers curb vehicle sales to the rental car industry.