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The Tulsa, Okla.-based company earlier warned it does not expect to meet its forecast for 2008 earnings of $1.00 to $1.50 a share.
"Our second quarter was below our expectations with challenges primarily in the areas of revenue per day and vehicle depreciation costs. In addition, the balance of the year looks less robust than we had forecasted, given overall economic trends," said Chief Executive Gary Paxton.
The stock tumbled 40% to $5.70 in recent trading, an all-time low for the stock. Volume of about 1 million shares was more than double the issue's 30-day average daily volume of 357,538 shares.
CL King & Associates lowered its price target on the stock to $12. The firm also cut its 2008 estimate to a loss of 71 cents a share from earnings of 85 cents a share, and its fiscal 2009 estimate to 75 cents from $1.50 a share.
In a note to clients, analyst Michael Gallo said the company's new guidance would imply improvement in the back half to be profitable, "which based on the current environment looks optimistic, in our view."
"With little to no visibility and a continued deterioration of the travel industry it is unclear when trends will improve," Gallo said.
Other car-rental shares also moved sharply lower, with shares of Avis Budget Group Inc. down 12.4% to $7.34 and Hertz Global Holdings Inc. declining 10.1% to $8.62. Wanfeng Zhou wz/vj
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