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Will Rental Revenues Boost Herc Holdings' (HRI) Q1 Earnings?

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Herc Holdings (HRI - Free Report) is scheduled to release first-quarter 2019 financial numbers on May 2, before market open.

In the last reported, the company delivered better-than-expected earnings per share. Furthermore, Herc Holdings has an impressive earnings surprise history, having surpassed the consensus mark in three of the trailing four quarters.

Investors are keeping their fingers crossed and hoping that Herc Holdings will deliver a solid performance and surpass the earnings estimate in the soon-to-be-reported quarter as well.

Let’s delve deeper and find out the factors likely to impact Herc Holdings’ quarterly results.

We expect equipment rental revenues to increase in the first quarter and provide a boost to the top line. Apart from favorable market conditions, the company’s fleet and customer diversification initiatives should lead to an uptick in rental revenues. Its focus on improving equipment mix and reducing fleet age is also likely to support top-line growth in the soon-to-be-reported quarter.  Favorable pricing might too boost results.

Meanwhile, reduction in effective tax rate due to the current tax law should aid bottom-line growth. However, high operating expenses may limit bottom-line growth in the soon-to-be-reported quarter. Increased personnel and transportation costs are likely to bump up operating expenses. Additionally, high net fleet capital expenditures may hurt the bottom line by pushing up costs.

What Does the Zacks Model Say?                                                                        

Our proven model does not predict an earnings beat for Herc Holdings in first-quarter 2019. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Herc Holdings has an Earnings ESP of 0.00% as the Most Accurate Estimate is in line with the Zacks Consensus Estimate.

Zacks Rank: Herc Holdings carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Picks

Investors interested in the Zacks Transportation sector may consider Ship Finance International Limited (SFL - Free Report) , ArcBest Corporation (ARCB - Free Report) and Kirby Corporation (KEX - Free Report) as these stocks possess the right combination of elements to beat on earnings in the upcoming quarterly releases.

Ship Finance has an Earnings ESP of +7.69% and a Zacks Rank of 3.

ArcBest is a #3 ranked player and has an Earnings ESP of +3.33%. The company will report first-quarter 2019earnings numbers on May 2.

Kirby carries a Zacks Rank #2 and an Earnings ESP of +1.67%. This company will announce first-quarter 2019 earnings numbers on May 2.

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