Oklahoma-based car rental company Dollar Thrifty Automotive Group, Inc. raised its corporate adjusted EBITDA forecast for the full-year 2010 on September 7, citing strong operating performance in the months of July and August, and the continuing projections of lower fleet costs. The company also provided an update on fiscal 2011 outlook.
The Tulsa, Oklahoma-based company raised its fiscal 2010 forecast for corporate adjusted EBITDA, excluding merger-related expenses, to a range of $240 million to $260 million from the prior guidance in the range of $200 million to $220 million. The company had earlier raised it guidance in early July.
Dollar Thrifty attributed the increase to projected lower fleet costs, and the continued strength in operations and ongoing cost control efforts at the company.
The company also noted that it continues to expect vehicle rental revenue for the full year of 2010 to increase 1% to 2% from last year. Meanwhile, the company lowered its expected fleet cost target to a range of $230 to $240 per unit per month from the prior forecast of $245 to $255 per unit per month.
Meanwhile, the company also lowered its estimate for vehicle depreciation per unit per month to a range of $270 to $290 for the third and fourth quarters of 2010 from $300 to $310 per unit per month, citing continued strength in residual values and favorable trends in vehicle disposition results.
For fiscal 2011, Dollar Thrifty reaffirmed its previously announced fleet cost estimate of $300 to $310 per unit per month. The is expected to lead to corporate adjusted EBITDA for the full-year 2011 to range between $186 million and $198 million.
The company added that it expects the used car market in 2011 to be based on solid fundamentals, though less robust than now, as demand for used cars is expected to be firm, while supply is expected to be somewhat constrained.
Car rental companies are slowly recovering from the recession, which battered demand from business and leisure customers, after having struggled in recent years due to reduced travel budgets, falling used-car prices and large debt loads.
DTG closed Tuesday's regular trading session at $47.04, down $0.69 or 1.45% on a volume of 1.18 million shares, higher than the three-month average volume of 0.89 million shares.