NEW YORK: Hertz Global Holdings Inc posted a larger-than-expected loss in the first quarter after the rental company shrank its fleet of cars and some customers slowed bookings.
Revenue fell 13% in the period, contributing to an adjusted loss of US$1.12 per share, the company said in a statement on Monday.
Analysts had expected a 99-cent deficit on average, according to estimates compiled by Bloomberg.
The company showed declines on multiple key metrics.
While forward bookings from leisure customers were up from a year ago, demand from corporate and government customers has moderated.
Hertz was offering fewer cars for rent as it freshened its fleet and contended with President Donald Trump’s trade war that has rattled markets and consumer sentiment.
Bill Ackman’s Pershing Square Capital Management has amassed a nearly 20% stake in the rental giant, in a part as a bet that tariffs will drive up the value of Hertz’s fleet.
Ackman has said that he thinks the worst is behind Hertz though he expects near-term results will be weak.
Hertz shares fell about 5% in extended New York trading. The stock had gained 90% this year through Monday’s close.
Hertz said on Monday that it remained on track to reach positive adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) in the third quarter of this year.
Its first quarter adjusted Ebitda loss was US$325mil, worse than analysts expected.
One culprit for missing estimates was a shortfall in revenue, which was US$1.8bil when analysts expected US$2bil.
The company’s vehicle utilisation rate climbed to 79%, up three percentage points from a year ago, but still historically weak.
Hertz said it’s on track to reduce depreciation on its cars to less than US$300 per month in the second quarter, earlier than expected.
This was the first quarter in which Hertz is no longer unloading electric vehicles, which renters shunned and resulted in high repair costs. — Bloomberg
