Hertz Global Holdings slashed its full-year profit forecast as the car rental company expects to take a hit from higher vehicle depreciation, sending its shares down nearly 30% in extended trading.
The company, which operates its fleet under brands such as Hertz, Dollar and Thrifty, forecast adjusted profit of 51 cents-88 cents per share for the year, compared with its earlier estimate of $2.75-$3.50 per share.
Revenue from the company’s U.S. Car rental business, which is also its biggest, fell 1.9% to $1.71 billion for the third quarter ended Sept. 30.
Net income from continuing operations at Hertz (HTZ) fell 79.7% to $44 million, or 52 cents per share, from a year earlier.
“A customary vehicle depreciation rate review near the close of the third quarter resulted in a substantial depreciation adjustment, particularly on compact and mid-sized vehicles,” Chief Executive John Tague said in a statement.
Tague said he expected more adjustments in the current quarter.
The company’s revenue fell 1.3% to $2.54 billion, while total expenses rose 5% to $2.43 billion.
Excluding items, the company earned $1.58 per share for the quarter.
Analysts on average were expecting an adjusted profit of $2.73 per share and revenue of $2.59 billion, according to Thomson Reuters I/B/E/S.
Up to Monday’s close, shares of the Estero, Florida-based company had lost more than a third of their value this year.