Hertz narrows adjusted quarterly loss on record pricing, commercial strength

Investing.com -- Hertz reported a narrower adjusted loss for the second quarter on Thursday as record rental pricing and strong commercial execution lifted revenue despite a smaller fleet and elevated vehicle recalls, with the company saying its turnaround efforts continued to gain momentum.

The car rental company posted an adjusted net loss of $47 million, or 11 cents per diluted share, compared with an adjusted loss of $91 million, or 29 cents per share, a year earlier. Revenue rose 10% to $2.40 billion, while adjusted corporate EBITDA improved to $81 million, exceeding the high end of the company's revised guidance.

The results underscore Hertz's ongoing transformation strategy, which focuses on improving the profitability of its core rental-car business while expanding into fleet management, vehicle services and mobility. Chief Executive Gil West said disciplined execution and commercial strength drove operational improvements across the business even as the company managed a fleet that was 1% smaller than a year ago.

Revenue per unit increased 8% year over year, while revenue per day climbed 9% on strong pricing. Vehicle utilization improved to 79%, or 81% excluding recall impacts, and the spread between revenue per day and direct operating expenses widened 17% for a third consecutive quarter.

Hertz said elevated vehicle recalls remained a significant drag on results, with recall activity roughly three times higher than a year earlier and affecting nearly 15,000 vehicles on average. The company estimated the recalls reduced GAAP net income by about $27 million and adjusted EBITDA by approximately $30 million during the quarter.

Looking ahead, Hertz said it expects full-year revenue per unit to exceed its long-term target of $1,500 and reiterated its goal of keeping full-year net depreciation per unit at or below $300. The company ended the quarter with $984 million in liquidity and said it remains confident it has sufficient resources to fund its transformation initiatives.

You May Also Be Interested In

• Asana shares tumble on weak third quarter earnings outlook
• Ciena (CIEN) Tops Q3 EPS by 39c, Offers Guidance
• Oxford Industries (OXM) Tops Q2 EPS by 4c; offers guidance