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Hertz 4Q earnings strong
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January 19, 2000: 4:54 p.m. ET
More leisure customers boost profits at world's largest car rental company
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NEW YORK (CNNfn) - Improved car rental pricing, more leisure customers and new technology helped the Hertz Corp. post better than expected fourth quarter earnings Wednesday.
The world's largest car rental company, based in Park Ridge, N.J., posted 1999 earnings of $60.3 million for the quarter, or 56 cents a diluted share. That's up 26 percent from the $47.9 million the company earned for the same period last year and more than the expected 52 cents a diluted share predicted by First Call Corp.
First Call analysts are projecting an 18 percent growth for 2000.
A strong economy spurred more leisure customers overall in the car rental industry. That, combined with Hertz' already strong business rental base, contributed to the company's better-than-expected earnings, said Meg Saegebarth, a Goldman Sachs analyst.
Saegebarth said Hertz (HRZ) tries to stay ahead of competitors by offering special conveniences to business customers.
Expanding the number of Global Positioning System units, devices that provide directions via satellite, in its cars over the past six years has also contributed to increased business, said Lauren Garvey, a Hertz spokeswoman.
Expanding on a $50 million agreement with GPS manufacturer Magellan in 1998, Hertz plans to install more than 50,000 units in its cars worldwide this year, Garvey said.
Customers pay an extra $6 for the service.
Hertz also announced that it would not acquire Axus International, Inc., a London-based car leasing company owned by Ford Motor Credit.
Instead, the company plans to license the Axus name and enter into a five-year management services contract covering select international markets.
Saegebarth said licensing the small London-based car rental company was more favorable than acquiring it because now Hertz does not have to put money into car maintenance.
For the full year, Hertz earned $1.2 million, or 56 cents a diluted share, up from the $1.1 million, or 44 cents a diluted share, it earned in 1998.
Shares of Hertz were up 1 ¼ late in the day Wednesday to 50 11/16. 
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Hertz Corporation
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