Earlier this week, Dollar Thrifty Automotive Group issued a preliminary guidance on the results it expects for its first quarter of the year. The company gave an update on corporate adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and earnings per share expectations for the year.
It expects corporate adjusted EBITDA to be between $75 million and $80 million for the first quarter. This is much better than the $36.3 million reported for the same period last year. Earnings per share is expected to be between $1.30 and $1.40 per diluted share, which is up from the $0.53 reported for last year’s first quarter.
These significant improvements were primarily caused by favourable fleet costs and the combination of lower interest and expenses from general services, administrative services and selling assets compared to the year before. Fleet costs benefited from lower depreciation rates, as well as gains on sales of risk vehicles. This was supported by the domestic used vehicle market’s continued strength. Dollar Thrifty also noted that it expects gains on sales of risk vehicles to be around $14 million, which is up from the $8 million reported in the first quarter of last year.
Rental revenue is due to rise about 2% compared to last year, which has mostly been driven by transaction days and improved fleet utilisation. It has been partially offset by a fall in revenue per day. Per month, revenue per unit is forecast to be in line with last year.
Based on this performance and expectations, Dollar Thrifty noted that it’s revising its guidance for the full year for diluted earnings per share, which they expect to be between $5 and $5.60. This is an increase from the previous guidance of between $4.60 to $5.20. The revised full year earnings per share is currently based on about 29.5 million diluted shares. It also expects corporate adjusted EBITDA to be between $285 million and $310 million – a slight increase from $275 million and $300 million.
These figures are based on information available to Dollar Thrifty as of now. It plans to hold a conference call to review the first quarter results on Wednesday, May 9 at 8am CDT. The conference call will be led by president and chief executive Scott Thompson, but chief financial officer Cliff Buster will participate as well.
Dollar Thrifty Automotive Group is the parent company of the Dollar Rent A Car and Thrifty Car Rental brands. The group has been serving budget-minded leisure and business travellers since 1950 and maintains a strong domestic leisure travel presence in basically every top airport market in the US and Canada. A significant portion of its revenue also comes from international travellers to the US under contracts with various worldwide tour operators.
Across the Dollar Rent A Car and Thrifty Car Rental brands there are about 280 corporate locations in the US and Canada, which are manned by some 5,900 workers. Additionally, the group maintains international service capabilities through a franchise network of about 1,300 locations across 82 countries.
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