Hertz Global lowers Q1 and FY16 rev per available car day guidance due to excess industry capacity; reaffirms FY16 EBITDA, sees FY16 EPS in-line:
Due to what the co believes is excess industry capacity, it now expects its first quarter and full year 2016 U.S. car rental (U.S. RAC) revenue and consolidated first quarter adjusted earnings per share to be lower than previously expected.
Despite this reduction, the co is affirming its full-year 2016 adjusted Corporate EBITDA guidance within a range of $1.6 to $1.7 billion.
For the first quarter 2016, Hertz Global Holdings expects U.S. RAC revenue per available car day (:RACD) to decline between 2.5 to 3.5 percent versus the same period last year on low single-digit growth in transaction days.
For the full year 2016, Hertz Global Holdings now expects U.S. RAC total revenue to be flat to 1.5 percent lower versus the co's previous guidance of 1.5 to 2.5 percent growth year over year. The company continues to expect modest U.S. RAC transaction day growth in 2016, primarily driven by its on-airport business. In addition to maintaining its 2016 adjusted Corporate EBITDA guidance, the co sees FY16 adj. EPS $0.95-1.10 vs. $1.04 consensus.
"We are disappointed that the pricing pressure experienced late in 2015 further intensified in the first quarter of 2016. However, we believe that industry capacity will likely moderate as seasonal demand improves establishing the foundation for a relative improvement in pricing as we head into the peak summer season."
Hertz Global Holdings continues to expect to achieve $350 million of incremental savings in 2016. Similar to 2015, the company expects a lower rate of savings realization during the first half of the year as targeted initiatives ramp up throughout 2016.
Peer: Avis (CAR).
No comments:
Post a Comment