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Hertz Posts Strong 4th Quarter and Full-Year Profits

Hertz Global last week posted a strong quarterly profit, aided by recent cost-saving cuts as well as strong performances in the company’s car rental and equipment rental units. Net income for the fourth quarter was $39.8 million, 14 cents per share, compared with a $27.6 million, 12 cents per share loss in the same period last year.

Income on an adjusted basis for the quarter increased 152 percent year over year, from $32.5 million (10 cents per share) to $81.7 million (25 cents per share). Total revenue for the quarter was $1.99 billion, an 8 percent year-over-year hike.

Worldwide equipment rental revenues were a company record $436.0 million for the fourth quarter, a 10.6-percent increase from the previous year’s fourth quarter. The company said U.S. revenue growth trends have been moderating because of slower non-residential construction growth, particularly in the southeast region. This has been partially offset by strong growth in industrial and other sectors in the United States and Canada, the company said. Fourth-quarter 2005 revenue increases that increased more than 20 percent compared with 2004’s fourth quarter were partially attributed to unusually heavy demand caused by Gulf Coast hurricane damage in the second half of 2005.

Income before taxes and minority interest increased 40.7 percent year over year for the fourth quarter to $79.2 million. The company credited improved worldwide volume and pricing and better expense management.

Full-year 2006 revenue for Hertz Global was $8.06 billion, a 7.9 percent year-over-year jump. Equipment rental revenues were $1.67 billion, an 18.2 percent increase from 2005.

Hertz Global chairman and CEO Mark Frissora said operating expenses were cut by more than two percentage points of revenue compared with the same period last year.

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