Dollar Thrifty Automotive Group Raises Full-Year Outlook

Dollar Thrifty Automotive Group has increased their adjusted earning expectations for the full 2010 year. They are citing falling costs as the main factor for this rise.

The company said in a statement that their corporate adjusted earnings before interest, taxes, depreciation and amortization will range from US$240 million to $260 million. This is a $40 million increase from their previous guidance.

A better estimate on cost control efforts and operating performance are the reason for this change. Lower costs to the car hire company’s fleet are also part of that, as they will get to lower their target for the whole year to $230-$240 per vehicle per month. They expect to spend $300-$310 per unit per month going into next year.

Dollar Thrifty also says that they believe demand for used vehicles will be strong next year, while supply is still a little constrained. However, they anticipate the used car sector to be slightly less robust next year compared to now.

Meanwhile, the fourth largest car rental firm in the US is in the middle of a bidding war between Avis Budget Group and Hertz Global Holdings. Both companies want to buyout the business, and Hertz would probably be the better choice overall.

However, there is some uncertainty among Dollar Thrifty shareholders that going with Hertz is the wrong decision. Last month they asked a court to halt a scheduled vote this month on the $1.2 billion bid, as they think this figure undervalues the company. This change of heart came after Avis Budget made a bid of $1.3 billion, while Dollar Thrifty shares continue to rise.