Hertz Global Holdings, Inc (NYSE:HTZ) reported disappointing first-quarter results on Monday, and that has investors abandoning HTZ stock in droves Tuesday morning.
Hertz shares are off 18% today after the car rental firm reported a first-quarter net loss from continuing operations of $223 million, or $2.69 a share, including $30 million in impairment charges, compared with a net loss from continuing operations of $52 million, or 61 cents a share, in the comparable period last year, according to a company announcement.
Analyst expectations were a loss of 90 cents a share on sales of $1.95 billion. HTZ stock was already down more than 30% this year before the announcement.
After adjusting for one-time items, HTZ had a net loss of $134 million, or $1.61 a share, compared with an adjusted net loss of $67 million, or 79 cents a share. Total revenue for the quarter was $1.92 billion, 3% less than $1.98 billion a year ago.
Total U.S. car rental revenues were $1.4 billion in the first quarter, down 4% versus the same period last year, according to the company. Transaction days decreased by 1% year-over-year, primarily driven by one less rental day, factoring in 2016’s Leap day. Pricing, as measured by total revenue per driver, decreased by 3% in the quarter, “impacted by an unfavorable customer mix, which the company is currently addressing as part of its long-term improvement plan. Revenues were also impacted by the shift of the Easter holiday into the second quarter this year,” the company said.
“While we are mindful of today’s headwinds related to used car residual values, our commitment to investing in the business remains steadfast,” said Kathryn V. Marinello, president and chief executive officer, according to a press release. “In particular, we are placing significant emphasis on fleet quality, the customer experience, brand development and systems transformation. These investments are critical to rebuilding our position as a leader in the global rental car market.” Hertz has 8,500 locations across the country.
Hertz is in the midst of a turnaround plan — focused on four areas for growth: fleet, service, marketing and technology — which it announced in February. Last June, HTZ said it was expanding a car rental program to drivers working for Uber Technologies Inc. and Lyft Inc. The program was aimed at increasing its reach in the burgeoning ride-hailing business.
“While our performance doesn’t yet reflect our investments and may continue to be uneven, we are seeing signs of progress,” said Marinello.