Hertz to review 3 years of accounting
Hertz Global Holdings, the car- and equipment-rental company that's splitting in two, tumbled the most in seven months after saying it needs to fix three years of accounting and that quarterly results won't meet consensus estimates on weak car-rental revenue.
The shares slumped 9 percent to close Friday at $27.73 after earlier falling as much as 12 percent for the biggest intraday drop since Nov. 5. Through Thursday's close, the stock had added 6.5 percent this year.
Hertz's audit committee said financial statements for 2011 can't be relied upon and should be restated, which will also require corrections to its 2012 and 2013 reports, according to a regulatory filing Friday. Hertz, based in Naples, Fla., will conduct a "thorough" review of all three years, which could result in material adjustments for the last two years.
"There's clearly something deeper going on than we've seen," said Maryann Keller, an auto-industry consultant and former director of Dollar Thrifty Automotive Group, which Hertz acquired in 2012. "We have no idea what we're dealing with here, no idea what this company's financial condition is, what the past level of profitability is and no basis on which to judge what it's future profitability may be."
Hertz also said first-quarter U.S. daily car-rental revenue fell 1.6 percent from a year earlier, including its new Firefly discount brand, as it carried excess fleet. The company's namesake brand airport rentals rose 1 percent, according to the filing.
Hertz said it found errors while preparing its first-quarter financials that included the capitalization and timing of depreciation for "certain non-fleet assets." The company also said it found other mistakes in how it accounted for money it couldn't collect from renters who damaged their rentals.
-- Bloomberg News
Brazil trading down as World Cup nears
The opening game of the World Cup is five days away, but traders in Brazil are already more focused on soccer than stocks.
Trading volume was below $1.8 billion every day this week, according to data compiled by Bloomberg.
"The World Cup effect already started," Felipe Rocha, a strategist at Guide Investimentos, said by phone from Curitiba, Brazil. "If the World Cup was being played anywhere else, volumes would already be dropping. Now that it's here, it will be very slow."
Sao Paulo declared a holiday for Thursday, the first day of tournament play, meaning there will be no trading. On the other days Brazil plays -- June 17 and 23 for first-round games -- the stock and derivatives market will close two hours before the start of the matches.
-- Bloomberg News
Vanguard ranked No. 1 in 401(k) assets
Vanguard managed the most money in 401(k)-type retirement plans last year, passing longtime leader Fidelity Investments.
Vanguard had $613.5 billion in defined contribution assets as of Dec. 31, compared with $612.4 billion for Fidelity, according to trade publication Pensions & Investments. A year earlier, Fidelity managed $523.9 billion while Vanguard had $479.6 billion.
Both companies saw their assets swell as the Standard & Poor's 500 Index last year returned 32 percent, including reinvested dividends.
"People who sponsor retirement plans are finding low-cost index funds a compelling value and that has been a boon for us," said Chris McIsaac, managing director at Vanguard. McIsaac estimated Fidelity had held the No. 1 ranking for at least a decade.
Funds that mimic indexes have grown in popularity as investors have become skeptical about the ability of stock pickers to beat the market averages. As the firm most associated with indexing, Valley Forge, Pa.-based Vanguard has ridden the wave to become the largest player in the U.S. mutual fund business.
Fidelity remains the leader in 401(k)-type recordkeeping assets with about $1.4 trillion as of March 31. Recordkeepers administer the accounts, including sending out statements and operating participant websites. Fidelity spokesman Michael Shamrell declined to comment on the rankings.
Americans held $5.9 trillion in defined-contribution plans as of Dec. 31, according to the Investment Company Institute.
-- The Associated Press
Dole CEO sets terms to renew port lease
GULFPORT, Miss. -- Dole Foods Chairman and Chief Executive Officer David Murdock said he won't sign a new lease with the Port of Gulfport until he sees more progress on the $570 million West Pier restoration, an expansion funded by federal Hurricane Katrina relief money.
Murdock, 91, was on the Mississippi coast Thursday for the celebration of Dole's 50th anniversary at the port.
"I came in here because I wanted to see what is going on. I'm anxious to get this job finished.
"They've got to do something for us," Murdock said, "because it's a mess here. Their schedule is unsatisfactory to me. Too slow. We're going to stay, but we want them to be more considerate of us."
Dole's port lease expires in 2017. Despite a consultant's urging in August 2012 that the port secure a new longer-term lease with the company to support port-funded improvements, negotiations are only beginning.
Mississippi Gov. Phil Bryant said at a meeting to greet Dole executives that it's critical that the port keep Dole on the coast in the wake of the recent announcement that Chiquita will be leaving for New Orleans later this year.
-- The Associated Press
Infinity starts on delayed Chinese plant
Nissan Motor Co.'s premium Infiniti brand has restarted construction of a plant in northeastern China after plans for the factory were delayed by rising Sino-Japanese tensions in 2012.
The factory in the city of Dalian, in Liaoning province, will take 12 to 14 months to complete and have an initial annual production capacity of at least 100,000 vehicles, said Lu Feng, head of the legal and securities affairs department at Nissan's Chinese manufacturing partner Dongfeng Motor Group Co. Karin Zhang, Infiniti's Hong Kong-based spokesman, declined to comment.
Infiniti is preparing to start production in China as foreign automakers step up investments to increase their share of the world's largest auto market. Japanese-branded car sales slumped in the country in the aftermath of a Chinese consumer boycott in 2012 after tensions escalated between the two nations over ownership of a group of islands.
-- Bloomberg News
Business on 06/07/2014