Thrifty sees profits increase, but slower than expected

Thrifty’s profits during the third quarter of 2007 proved to be relatively lackluster and generally lower than what the rental company had been expecting. Thrifty, part of the Dollar Automotive Group, was faced with a 20% rise in costs associated with the depreciation its vehicles, a decline in the number and length of rentals and a 10% decrease in share values. The decline has caused Thrifty to revise its revenue and profit projections, bringing both down. One of the most significant expenses for Dollar-Thrifty has been the depreciation of its fleet of vehicles. According to the most recent statistics, these costs totaled 27.4% of the firm’s revenue, representing an increase of over 2% from 2006. Dollar is, however, optimistic that depreciation costs will begin to decrease in the coming months, as the company is expecting to receive a fleet of new 2008 vehicles.

Despite some concerns over increasing overhead costs at Thrifty, the company is still producing profits, though not as high as analysts and the firm itself originally expected. Dollar-Thrifty’s profits climbed to $11.3 million during the third quarter of this year, which does represent a significant increase over the $5.9 million figure that the company posted during the same period in 2006. Thus far, the firm’s revenue also rose, by approximately 7.7%, bringing it to $522 million. This figure, however, is less than the nearly $533 million that US analysts were predicting for the company. The somewhat disappointing financial news led Thrifty’s shares to drop by about $3 on the

New York exchange.

www.thrifty.com