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Hertz Global, which emerged from a pandemic-induced year-long bankruptcy last year, has witnessed the Zacks Consensus Estimate for third-quarter earnings being revised 22.7% downward over the past 60 days to $1.09. The consensus mark for the September-quarter revenues is currently pegged at $2.49 billion.
Against this backdrop, let’s discuss the factors that might have impacted Hertz Global’s performance in the September quarter.
We expect the inflation-induced high-interest-rate regime to have dented HTZ’s performance in the to-be-reported quarter. Higher interest rates flare up the cost of borrowing, thus increasing the possibility of an economic slowdown. The economic uncertainty is likely to have an adverse effect on car rental demand, in turn hurting Hertz Global’s top line.
Moreover, high total costs are likely to have hurt the bottom line in the to-be-reported quarter. Higher interest rates raise finance costs and potentially weaken borrowing and lending activities. Costs are likely to have been bumped up by escalated direct vehicle and operating expenses in the Americas Rental Car unit. Supply-chain-related woes are also likely to have weighed on HTZ’s performance. Favorable pricing is, however, expected to have boosted the top line in the September quarter.
What Does the Zacks Model Say?
Our proven model does not predict an earnings beat for Hertz Global this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Hertz Global has an Earnings ESP of -5.07% as the Most Accurate Estimate is 6 cents below the Zacks Consensus Estimate of $1.09. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Hertz Global currently carries a Zacks Rank #5 (Strong Sell).
Highlights of Q2 Earnings
Hertz Global’s second-quarter 2022 earnings (excluding 9 cents from non-recurring items) of $1.22 per share surpassed the Zacks Consensus Estimate of $1.13. The bottom line decreased 52.2% year over year. Total revenues of $2,344 million missed the Zacks Consensus Estimate of $2,359.8 million. The top line increased 25.2% year over year.
Stocks to Consider
Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on third-quarter 2022 earnings:
CPA has an expected earnings growth rate of more than 100% for the current year. CPA delivered a trailing four-quarter earnings surprise of 174.22%, on average.
JetBlue Airways (JBLU - Free Report) has an Earnings ESP of +1.67% and a Zacks Rank #3. JBLU will release results on Oct 25.
JBLU has an expected earnings growth rate of 67.73% for the current year. Strong air-travel demand (particularly for leisure) is expected to have aided JBLU’s performance in the September quarter.
Image: Bigstock
What's in the Offing for Hertz Global (HTZ) in Q3 Earnings?
Hertz Global Holdings (HTZ - Free Report) is scheduled to release third-quarter 2022 earnings on Oct 27, before market open.
Hertz Global, which emerged from a pandemic-induced year-long bankruptcy last year, has witnessed the Zacks Consensus Estimate for third-quarter earnings being revised 22.7% downward over the past 60 days to $1.09. The consensus mark for the September-quarter revenues is currently pegged at $2.49 billion.
Against this backdrop, let’s discuss the factors that might have impacted Hertz Global’s performance in the September quarter.
We expect the inflation-induced high-interest-rate regime to have dented HTZ’s performance in the to-be-reported quarter. Higher interest rates flare up the cost of borrowing, thus increasing the possibility of an economic slowdown. The economic uncertainty is likely to have an adverse effect on car rental demand, in turn hurting Hertz Global’s top line.
Moreover, high total costs are likely to have hurt the bottom line in the to-be-reported quarter. Higher interest rates raise finance costs and potentially weaken borrowing and lending activities. Costs are likely to have been bumped up by escalated direct vehicle and operating expenses in the Americas Rental Car unit. Supply-chain-related woes are also likely to have weighed on HTZ’s performance. Favorable pricing is, however, expected to have boosted the top line in the September quarter.
What Does the Zacks Model Say?
Our proven model does not predict an earnings beat for Hertz Global this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Hertz Global has an Earnings ESP of -5.07% as the Most Accurate Estimate is 6 cents below the Zacks Consensus Estimate of $1.09. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Hertz Global currently carries a Zacks Rank #5 (Strong Sell).
Highlights of Q2 Earnings
Hertz Global’s second-quarter 2022 earnings (excluding 9 cents from non-recurring items) of $1.22 per share surpassed the Zacks Consensus Estimate of $1.13. The bottom line decreased 52.2% year over year. Total revenues of $2,344 million missed the Zacks Consensus Estimate of $2,359.8 million. The top line increased 25.2% year over year.
Stocks to Consider
Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on third-quarter 2022 earnings:
Copa Holdings (CPA - Free Report) has an Earnings ESP of +0.26% and a Zacks Rank #2. CPA will release results on Nov 16. You can see the complete list of today’s Zacks #1 Rank stocks here.
CPA has an expected earnings growth rate of more than 100% for the current year. CPA delivered a trailing four-quarter earnings surprise of 174.22%, on average.
JetBlue Airways (JBLU - Free Report) has an Earnings ESP of +1.67% and a Zacks Rank #3. JBLU will release results on Oct 25.
JBLU has an expected earnings growth rate of 67.73% for the current year. Strong air-travel demand (particularly for leisure) is expected to have aided JBLU’s performance in the September quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.