NEW YORK, N.Y. – Hertz shares plunged more than 30 per cent in Tuesday trading and its rival, Avis, fell sharply after the company slashed its expectations for all of 2016 in what had already been a dismal year in the car rental business.
Both companies have wrestled with excess capacity in the market.
Hertz, which also owns Dollar and Thrifty, cited falling rental car volume and the diminishing values for the vehicles it owns.
Hertz said late Monday that it now expects earnings between 51 and 88 cents per share for the year, a fraction of its previous per-share forecasts between $2.75 and $3.50. Wall Street analysts had been projecting per-share earnings of $2.92 for the year, according to FactSet.
The company’s third-quarter earnings, also posted on Monday, were far below Wall Street expectations.
Hertz, based in Estero, Florida, said it plans to continue to cut costs to improve its finances.
Shares of Hertz Global Holdings Inc. fell $11.29 to $24.45 in afternoon trading. Shares of Avis Budget Group Inc., which holds its investor day next week, slumped 9.5 per cent.
Shares of Hertz, which last year was forced to restate earnings due to accounting errors, have fallen almost 70 per cent over the past 12 months. Avis has fallen 21 per cent in that same time.