(Reuters) - Car-rental company Dollar Thrifty Automotive Group Inc (DTG.N) posted a surprise quarterly profit, helped by lower expenses, and said it expects industry conditions to improve slightly in 2010.
Rental car companies have been hurt by the slowing economy as customers cut their discretionary spending on travel, translating to lower rentals.
Continued improvement in the overall economy, combined with ongoing recovery in the credit markets, is expected to result in low-single-digit growth in transaction days in 2010, the company said in a statement.
Dollar Thrifty, which rents cars under the Dollar Rent A Car and Thrifty Car Rental brands, said demand for value-oriented leisure brands and continued industry pricing discipline will result in moderate price increases in revenue per day on a year-over-year basis.
Recent favorable trends in the used vehicle markets will continue throughout 2010, resulting in solid residual values and improvements in monthly fleet operating costs year-over-year, the company said.
It expects 2010 vehicle rental revenue to be up 2 percent to 4 percent. In 2009, vehicle rental revenue was $1.47 billion.
Dollar Thrifty, which competes with Hertz Global Holdings Inc (HTZ.N) and Avis Budget Group Inc (CAR.N), expects 2010 vehicle depreciation costs to be about $325 per vehicle per month.
It sees corporate adjusted EBITDA of $120 million to $140 million for 2010.
REVENUE SLIPS
For the fourth quarter, net income was $11.5 million, or 42 cents a share, compared with net loss of $72.2 million, or $3.36 a share, a year ago.
On an adjusted basis, the company earned 28 cents a share.
Analysts on average were expecting the company to post a loss of 8 cents a share, according to Thomson Reuters I/B/E/S.
Total revenue fell 3 percent to $345.3 million, due mainly to a decline in rental days, the company said.
Vehicle rental revenue in the quarter fell 2 percent to $329.7 million.
Selling, general and administrative expenses fell 13 percent to $46.6 million. Direct vehicle and operating expenses were down 11 percent at $178.4 million.
Shares of the Tulsa, Oklahoma-based company closed at $27.89 Tuesday on the New York Stock Exchange.
