Hertz Withdraws Full-Year Forecast, Expecting Weaker Results

Hertz said this week it is withdrawing its full-year financial forecast, stating in a regulatory filing that earnings would be “well below the low end of its 2014 guidance” because of “operational challenges.” The company also cited costs related to its accounting review.

In June, Hertz announced a review of its financial records after its audit committee concluded that problems with the company’s financial statements for the last few years would need to be corrected because of mistakes. Hertz delayed its first and second quarter financials. The company previously said it had identified errors totaling $46.3 million in the prior periods.

Hertz announced in March that it would spin off its equipment rental business, Hertz Equipment Rental Corp., into a separate business by early 2015, but has since acknowledged the spinoff could be delayed.

The company said in its filing that results will be affected by operational challenges including recalls by car makers, higher-than-expected expenses and weak demand in its equipment rental business.

Hertz’ difficulties have had an unsettling effect on shareholders. The company’s share price has dropped in recent days, and at least one major shareholder Fir Tree, a New York-based private investment firm, has asked the company to replace its CEO Mark Frissora, according to Bloomberg.