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Herc Holdings (HRI) to Report Q1 Earnings: A Beat in Store?

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Herc Holdings (HRI - Free Report) is scheduled to report first-quarter 2021 results on Apr 22, before the market opens.

The company has a stellar history with respect to earnings surprises. Its bottom line surpassed the Zacks Consensus Estimate in each of the last four quarters, the average being 85.4%. Moreover, the Zacks Consensus Estimate for first-quarter 2021 earnings has been revised 56.3% upward over the past 60 days.

Herc Holdings Inc. Price and EPS Surprise

Herc Holdings Inc. Price and EPS Surprise

Herc Holdings Inc. price-eps-surprise | Herc Holdings Inc. Quote

Against this backdrop, let’s discuss the factors that might have impacted Herc’s performance in the March quarter.

We expect the company’s performance in the to-be-reported quarter to have been aided by the increased economic activities in the United States with the relaxation of restrictions. This is in turn is likely to have positively impacted volumes and pricing. Further, the improvement might have led to higher equipment rental revenues in the March quarter, sequentially. As equipment rental revenues account for bulk of the top line, the same is also likely to have bettered from the December quarter.

Moreover, Herc’s first-quarter results are likely to be boosted by its disciplined capital management. Evidently, the company’s free cash flow generation is expected to have been upbeat in the quarter to be reported. Moreover, efficient fleet management might have buoyed utilization in the to-be-reported quarter.

Despite the recent uptrend, the first-quarter performance is likely to have been unfavorable on a year-over-year basis. Notably, equipment rental revenues are likely to have declined year over year due to coronavirus-induced volume softness.

What Does the Zacks Model Say?

The proven Zacks model predicts an earnings beat for Herc this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates, which is the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Herc has an Earnings ESP of +18.81% as the Most Accurate Estimate is five cents above the Zacks Consensus Estimate of 25 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Herc sports a Zacks Rank of 1, currently.

Highlights of Q4 Earnings

Herc’s earnings (excluding 16 cents from non-recurring items) of $1.35 per share surpassed the Zacks Consensus Estimate of $1.01. Moreover, the bottom line expanded 1.5% on a year-over-year basis. Operating revenues of $520.4 million also beat the Zacks Consensus Estimate of $483.8 million.

Other Stocks to Consider

Investors interested in the Zacks Transportation sector may also check out some other stocks worth considering, which possess the right combination of elements to beat estimates in the upcoming releases.

Landstar System (LSTR - Free Report) has an Earnings ESP of +0.79% and is Zacks #2 Ranked, presently. The company will release first-quarter 2021 results on Apr 21.

United Parcel Service (UPS - Free Report) has an Earnings ESP of +2.07% and carries a Zacks Rank of 3, at present. The company will release first-quarter 2021 results on Apr 27.

JetBlue Airways (JBLU - Free Report) has an Earnings ESP of +3.09 and carries a Zacks Rank #3, currently. The company is set to release first-quarter 2021 earnings numbers on Apr 27.

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