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Hertz falls 1% after rental car company lowers outlook amid soft quarter

Published 08/08/2016, 07:50 PM
Updated 08/08/2016, 07:54 PM
Hertz moved lower on Mon. after suffering declining revenues, profits in the second quarter

Investing.com -- Shares in Hertz Global Holdings fell slightly in after-hours as the global rental car company lowered its full-year forward guidance on Monday after missing analysts' earnings forecasts and suffering declining revenues over the second quarter of fiscal year 2016.

For the quarter, Hertz swung to a loss of $43 million or 0.51 per share, down considerably from a net profit of $36 million or per-share earnings of 0.39 over the same period in 2015. On an adjusted-share basis, excluding one-time items from restructuring costs, Hertz reported gains of 0.69, down substantially from 1.19 during last year's second quarter. Hertz also experienced an unanticipated loss of $20 million on the quarter stemming from additional insurance-related expenses among historical cases in the U.K.

In total, Hertz finished the quarter with sales of $2.3 billion, representing a 2% decrease on a year-over-year basis. It marked the fourth consecutive quarter of revenue declines for the Florida-based rental company. Analysts expected to see adjusted per-share earnings of 0.31 on revenues of $2.27 billion.

"Significant work was accomplished this quarter as part of our three-to-five year margin improvement plan," said John Tague, Hertz Global Holdings President and Chief Executive Officer. "While still in the first year of the plan, we completed a number of strategic actions, improved our balance sheet, and made progress on technology development, all while reducing our cost base and achieving substantial improvements in customer satisfaction. These accomplishments are the result of the dedication and commitment of our employees all across our operation."

Moving forward, Hertz expects to finish with full-year adjusted earnings per share of 2.75-3.50, along with adjusted EBITDA of $850 to $950 million. Previously, the company projected full-year, adjusted EBITDA of $1.6 to $1.7 billion for 2016.

Hertz shares fell 0.80 or 1.67% to 46.52 in after-hours trading.

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