Back to top

Image: Bigstock

Hertz's (HTZ) Q4 Loss Narrower Than Expected, Revenues Miss

Read MoreHide Full Article

Hertz Global Holdings HTZ incurred a loss (excluding 59 cents from non-recurring items) of 24 cents per share in the fourth quarter of 2019, narrower than the Zacks Consensus Estimate of a loss of 25 cents. Moreover, the amount of loss decreased year over year.

Quarterly revenues of $2,326 million fell short of the Zacks Consensus Estimate of $2,340.6 million. However, the top line inched up 1.4% year over year, driven by an impressive performance of the U.S. Rental Car segment.

Segmental Performance

In the quarter under review, the U.S. Rental Car segment generated revenues of $1,673 million, up 6.2% year over year. This upside can be attributed to favorable pricing and higher volumes.

Vehicle utilization decreased to 79% from 81% a year ago. Transaction days improved 2% year over year on the back of robust demand from growth initiatives in TNC and delivery rentals. Total revenue per transaction day (RPD) increased 4%. Adjusted EBITDA for the segment was flat year over year at $48 million.

Segmental direct vehicle operating expenses rose 2.1% to $1,019 million. Meanwhile, interest expenses jumped 15.2%. Also, selling, general and administrative expenses climbed 3.3% year over year.

Hertz Global Holdings, Inc Price, Consensus and EPS Surprise


Hertz Global Holdings, Inc Price, Consensus and EPS Surprise

Hertz Global Holdings, Inc price-consensus-eps-surprise-chart | Hertz Global Holdings, Inc Quote

The International Rental Car segment generated revenues of $474 million, down 3% year over year. This downside was due to decreased volumes as a result of persistent weakness in the European market. Meanwhile, segmental revenues were flat on constant currency basis. Vehicle utilization was flat at 72%. Segmental RPD rose 1%.

Segmental direct vehicle operating costs were up 4% year over year to $312 million. However, interest expenses decreased 8%. Selling, general and administrative expenses also declined 16.4% year over year. Adjusted EBITDA for the segment came in at a loss of $10 million against profit of $8 million in the year-ago period. Meanwhile, revenues from all other operations plunged 23% to $179 million.

Balance Sheet Highlights

The company exited the fourth quarter with cash and cash equivalents of $865 million compared with $1.13 billion at the end of 2018. Restricted cash and cash equivalents at the end of the period came in at $495 million compared with $283 million at 2018 end. As of Dec 31, 2019, total debt amounted to $17.09 billion compared with $16.32 billion as of Dec 31, 2018.

Zacks Rank & Key Picks

Hertz carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are GATX Corporation (GATX - Free Report) , Azul SA (AZUL - Free Report) and Controladora Vuela Compania de Aviacion, S.A.B. de C.V. VLRS, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

GATX has an impressive earnings history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 21%.

Shares of Azul and Controladora Vuela have rallied more than 18% and 42%, respectively, in a year’s time.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

GATX Corporation (GATX) - free report >>

AZUL SA (AZUL) - free report >>