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Zipcar shares plunge on 1Q loss

CAMBRIDGE, Mass. (AP) -- Zipcar Inc.'s shares plunged to their lowest level ever Wednesday after the car sharing company reported another quarterly loss.

The Cambridge, Mass.-based company is the largest and most well-known car sharing business around. Its popularity and membership base has grown steadily over the years, but it has failed to impress investors.

Zipcar, founded in 2000, had never posted a profit when it went public in April 2011. Critics claimed the popularity of its IPO was based on name recognition and a cool factor, rather than solid financials. The company's shares priced at $18 per share for its offering and jumped to $28 in the first day of trading, but have fallen steadily since.

In afternoon trading Wednesday, the stock fell $1.38, nearly 10 percent, to $12.45 following its earnings report Earlier in the session, shares bottomed out at $12, dropping below the prior low of $12.04, reached in December.

Zipcar narrowed its first-quarter loss to $3 million, or 8 cents per share, for the period that ended March. 31. That's compared with a loss of $6.1 million, in the prior year's period.

Total revenue rose 20 percent to $59.1 million, from $49.1 million last year.

Analysts, on average, expected the company to post a loss of 11 cents per share, on revenue of $59.3 million, according to FactSet. The company has now reported a profit in only two of its five quarters since going public. .

Zipcar, founded in 2000, offers users a twist on the typical rental-car business. Instead of going to a rental lot, members reserve a car that's parked nearby, which they unlock with a keycard. Zipcar doesn't require members to keep the car an entire day; rather, the cars can be rented out by the hour.

The company said it grew its total membership base by 23 percent to more than 709,000 people during the first quarter. And its usage revenue per day increased 5 percent to $60 from $57 in the prior year.

But it also had major expenses during the period, including expanding its cargo van service and investing $8.7 million in Wheelz, another car sharing company that weighed on its performance.

Zipcar said it could post another loss in the second quarter, but gave a guidance range that included the possibility of turning a profit. The company said it could report anything from a loss of $1 million to net income of $1 million.

Analysts, on average, expect Zipcar will report net income of $700,000, with estimates ranging from a loss of $200,000 to a profit of $1.6 million.

The company forecast revenue of $71 million to $74 million for the second quarter. Analysts estimates average $74 million, with a range from $71.4 million to $76.9 million.

The company stood by its expectations of earning $3 million to $7 million on revenue of $290 million to $296 million for the full year. Analysts are forecasting net income of $5 million, on revenue of $292.1 million.