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Zipcar shares sink on weak Q1 forecast

Last updated: 09:57 14 Feb 2012 EST, First published: 10:57 14 Feb 2012 EST

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Zipcar (NASDAQ:ZIP) saw its stock shed nearly 15 percent on Tuesday, as the company said it expects first quarter revenues to drop.

On the Nasdaq Exchange, shares of the company declined 14.81 percent to $13.75, as of 10:35 am EDT.
For the first quarter of fiscal 2012, the car sharing network said it anticipates revenues between $58 and $60 million.

Zipcar said the decline from the latest quarter's almost $63 million in sales is due to the first three months of the year being seasonally slow.

For the full year fiscal 2012, the company anticipates revenues between $290 and $296 million.

Earnings for the three months that ended December 31 came in at $3.9 million, or $0.09 per share, from a loss of $1.1 million, or $0.17 per share, a year ago.

CFO Ed Goldfinger said: "During the 2011 fourth quarter we continued to see strong year-on-year growth in our North American markets offset in part by slower growth in our UK operation as we completed the integration of the acquired operations.

"We were able to further leverage costs and increase vehicle utilization to drive higher margins in the business. We also doubled the size of our ABS facility which provides us with additional funding capacity and flexibility as we transition our domestic fleet to owned vehicles at a lower cost of capital."

Revenues for the latest fourth quarter rose 20.7 percent to $62.9 million, from $52.1 million a year earlier, bolstered by a 25 percent hike in members, to over 673,000 at the quarter's end.

Usage revenues on a per day basis increased seven percent to $63. Overall, useage revenues increased 17.7 percent to $53.3 million.

Fee revenues represented 15 percent of total revenues during the quarter.

CEO Scott Griffith commented: "Our fourth quarter results capped off a record year of revenue and profitability gains.

"We reported our second consecutive quarter of profitability and posted accelerated growth in our established markets while expanding our global network of cities, both domestically and abroad.

"In addition to our market leadership in North America, Zipcar stands today as one of the largest car sharing operators in Europe and we look forward to building our presence in this attractive market."

In the full year 2011, Zipcar narrowed its net loss to $7.2 million, or $0.24 loss per share, compared to a loss of $14.1 million, or $2.74 loss per share, a year ago.

Revenues rose 29.8 percent to $241.6 million last year.

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