Hertz
on Tuesday reported that third-quarter commercial pricing for its on-airport
operations was flat year over year, while leisure pricing increased 4 percent.
But CEO Mark Frissora told analysts during a conference call that contracted
pricing is firming.
"Seventy-five
percent of our corporate contracts negotiated so far this year have been flat
to up [in terms of pricing], so that's kind of good news," he said.
"We are heading in the right direction." He noted that the company
"saw positive airport pricing last month."
Echoing
what leaders at big competitor Avis Budget Group have been saying all year,
Frissora added that Hertz is "not going after share to drive commercial
volume. We are trying to maintain the existing share we have."
Meanwhile,
Frissora suggested that Hertz suffered "a hit from the government
sequester more than our competitors, maybe, because we have a very high share
of commercial business associated with government business." That was one
of multiple factors that led to a 3 percent year-over-year reduction in Hertz's
airport car rental volume during the third quarter.
"As
the fourth quarter develops for U.S. rental car [operations], we are encouraged
by improving airport volumes for our Hertz brand which are now running at more
normalized single-digit-growth since the government shutdown ended in
mid-October," he explained.
Frissora
also said that the integration of Dollar Thrifty, acquired in late 2012,
"is on track." That acquisition helped Hertz's total U.S. car rental
operations achieve a 33 percent revenue jump to $1.8 billion, only
"partially offset" by the divestiture of the
much smaller Advantage brand. The number of transactions and transaction days
jumped 25 percent and 28 percent, respectively, while total revenue per
transaction day increased 2 percent to $48.33. Adjusted net income for Hertz's
U.S. car rental operations improved to $254.7 million from $209.2 million a
year earlier.
The
company's international car rental segment also performed well during the third
quarter, including 5 percent more transactions than in the year-earlier period,
6 percent more transaction days, a 3 percent increase in total revenue per transaction day to $55.27 and adjusted net income of
$84.1 million, up from $65.6 million.
Overall,
Hertz reported a "ninth consecutive quarter
of record adjusted pre-tax income, which increased 22.3 percent year over year"
to $519.5 million, according to Frissora, citing "solid
revenue growth" in U.S. off-airport car rental, the Dollar Thrifty brands,
worldwide equipment rental and the Donlen fleet leasing and management
division.
Including all one-time and special items, the company's
total third-quarter net income fell to $214.7 million from $242.9 million a
year earlier.