Hertz plunges after withdrawing full-year outlook
It's been a rough road for the car-rental company. Analysts downgrade the stock after the news.
In other words, things are a mess at Hertz. The company's stock has been a favorite among prominent hedge fund managers like Glenview Capital Management's Larry Robbins, York Capital Management's James Dinan and Fir Tree Partners' Jeffrey Tannenbaum.
Shares of Hertz plunged by more than 11 percent in Wednesday morning trading to $27.95, but recovered to a 9.5 percent loss in the afternoon. The stock had previously risen in August to a 52-week high of $31.61.
Hertz said its rental car fleet had been hit by vehicle recall activity that had limited the number of cars it could rent to customers and operating expenses in its U.S. rental car operations had been higher than expected.
The company pointed to delays in installing counter systems that have upended the immediate financial benefits it was hoping to obtain from its $2.3 billion purchase of Dollar Thrifty Automotive. It also said there had been continued soft demand in the equipment rental business.
The withdrawal of financial guidance for 2014 is just the latest issue disclosed by Hertz. In June, the company announced a review of its financial records after its audit committee had concluded that problems with the company's financial statements for the last three years would need to be corrected to reflect mistakes. Hertz had delayed filing its second-quarter financials amid the financial review.
Earlier this year, the company found $46.3 million in out-of-period accounting mistakes in the past three years.
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