NEW YORK – Hertz is cutting its revenue expectations for the year, saying that the rental car market is suffering from excess capacity.
The news sent shares of Hertz tumbling 9 percent Monday in midday trading, and it dragged down rival Avis Budget Group by more than 7 percent.
There were implications that the industry was under pressure.
Avis had previously predicted flat pricing for the year.
"Overall, we are not surprised to see continued pricing pressure and overcapacity concerns weighing on the business given similar commentary by Avis earlier in the year," wrote Citi analyst Manish A. Somaiya.
Hertz CEO John Tague says that overflow will likely moderate heading into the peak summer season.
Hertz Global Holdings Inc. now expects U.S. car rental revenue to range from flat to dropping by 1.5 percent. The company had previously projected growth between 1.5 percent and 2.5 percent.
The company, based in Estero, Florida, expects revenue per available car day in the first quarter of between 2.5 percent and 3.5 percent.
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