Dollar Thrifty expects auto rental industry to maintain pricing discipline

Don’t expect rental car rates to come back down anytime soon. After reporting its fourth consecutive quarter of year-over-year growth in revenue per day (double-digit growth in the last three quarters), Dollar Thrifty Auto Group (DTG) cited “industry pricing discipline” as part of its expectation for 2-4% year-over-year revenue growth for 2010. Pricing will remain firm even though DTG does not expect a significant recovery in the rental business this year. DTG is focused on profitability:

“We continue to focus on profitability of rental transactions. If it is consistent with our strategy at times, we will lower our transaction days and utilization to maintain proper balance in price and volume.”

(For more details, click here for a transcript of the earnings conference call).

Automotive rental companies have staged an amazing comeback from the March, 2009 lows. For example, DTG traded as low as 60 cents at that time. After reporting earnings Wednesday morning, DTG soared over 8% to $30.25 – a new two-year high.

Dollar Thrifty Automotive Group Soars to Two-Year Highs

Dollar Thrifty Automotive Group Soars to Two-Year Highs

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Signs, signs, everywhere a sign

A bevy of new earnings reports brings interesting news about the state of the economy:

  • “Colgate 3Q profit rises 18% amid higher prices, prior-year charges.”
  • “Lower costs and higher prices help [glass manufacturer] Owens-Illinois.”
  • “Panera Bread 3Q profit climbs on higher prices.”
  • “Higher selling prices and lower commodity costs boost Kimberly-Clark’s 3Q profit.”
  • “Coca-Cola Enterprises Inc.’s third-quarter earnings rose 15%, helped by continued strong growth in Europe and price increases that boosted margins.”
  • “Swedish home-appliances maker Electrolux AB Monday posted a stronger-than-expected 93% rise in third-quarter net profit on the back of cost cuts, higher prices and lower raw-material costs…”
  • “Philip Morris, Reynolds beat profit estimates on higher prices.”
  • “Hynix Semiconductor Inc., the world’s No. 2 memory chip maker, reported its first quarterly profit in two years on Friday, bolstered by higher product prices.”
  • “Procter & Gamble Co. reported Thursday first-quarter net income fell 1% as higher prices offset a decline in sales volume and currency translations.”

Notice a pattern here?

More:

  • “Samsung Electronics Co., Asia’s biggest maker of chips, flat screens and mobile phones, said profit tripled to a quarterly record as the global economic recovery spurred a rebound in prices.
  • “Chocolate maker Hershey Co., helped by price increases and lower costs, reported Thursday that third-quarter profit rose 30% from last year and its raised its full-year profit outlook.”