Hertz's profit fell 89 pct, plans to cut jobs

PARK RIDGE, N.J. - Car-rental chain Hertz Global Holdings Inc. said its third-quarter earnings fell 89 percent as it prepares to cut 4.7 percent of it work force and close locations during a wrenching time for the industry.

Hertz also said it no longer expects to meet its earnings guidance and suspended its outlook.

In Thursday morning trading, its shares lost ground, falling 89 cents, or 13.4 percent, to $5.77. It closed Wednesday at $6.66. The stock is down 58 percent for the year.

Hertz, which reported results after the bell Wednesday, said its earnings fell to $17.7 million, or 5 cents per share, from $162.7 million, or 50 cents per share, a year ago.

Excluding charges, Hertz said earnings came to 33 cents per share. Wall Street expected 52 cents per share, on average, according to a Thomson Reuters' poll.

Revenue fell 1.1 percent to $2.42 billion from $2.45 billion.

Hertz said it launched a plan in September to let go an additional 1,400 employees and close 80 locations, attributing the cuts to declining volumes in the car and equipment-rental markets. It is also reducing the size of its vehicle fleets. It employs 30,000 people.

In a note to investors Thursday, Goldman Sachs analysts Christopher Agnew and Peter Wahlstrom called the results "very weak." They said the car-rental industry continues to have larger fleets than necessary, adding they expect profitability to remain weak until further fleet cuts are made.

Hertz said it took higher maintenance costs, increased advertising costs for its gasoline refueling and service-guarantee initiatives and higher fuel costs during the quarter.

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