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(ShareCast News) - US rental vehicle group Hertz Global posted stronger than expected net profits on Thursday as increased sales and revenue management successfully offset losses from cancelled reservations in those parts of the country which had been hit hard by hurricanes Harvey and Irma.
Hertz shares rose as much as 13% in after-market trading on Thursday evening, taking back some of the ground lost earlier in the week after competitor Avis Budget Group lowered its full-year earnings forecast due to the impact of the aforementioned storms, spooking investors across the market.
Revenue for the three months leading to 30 September went up 1% on the same time a year earlier, however, despite higher pricing, the US rental car industry as a whole reported a 1% decrease for the quarter.
Hertz said it was progressing with its turnaround plan, which included cutting the number of vehicles in its fleet, but noted that it was seemingly entering a period of softening levels of demand amid high investment.
"We are entering a seasonally low period of demand at the same time that we are continuing to invest in the long-term growth of the company," said chief executive officer Kathryn Marinello. "Expense always precedes benefit."
"Higher spending levels throughout 2018 are necessary to ensure predictable, sustainable earnings performance, beginning in 2019," she added.
The Floridian firm turned in a third-quarter net income of $93m, a huge increase from the $42m it collected the same time twelve months before.
Earnings per share also beat market expectations, coming in at $1.42 each, $0.07 over estimates.
As of 1612 GMT, shares were down 6.85% to $18.70 on heavier than average trading volumes.
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