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Hertz (HTZ) Q1 Loss Narrower-Than-Expected, Revenues Lag

Zacks Equity Research

Hertz Global Holdings, Inc HTZ incurred adjustedloss of 99 cents per share in the first quarter of 2019, narrower than the Zacks Consensus Estimate of a loss of $1.32. Moreover, the amount of loss decreased on a year-over-year basis. Solid pricing, volume growth and efficient fleet management benefited results.

Quarterly revenues came in at $2.11 billion, missing the Zacks Consensus Estimate of $2.17 billion. However, the top line improved 2.1% on 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 $1.52 billion, up 7% year over year. This upside can be attributed to expanded volumes and favorable pricing.

Vehicle utilization remained flat at 79% in the quarter. In first-quarter 2019, direct vehicle operating and selling, general and administrative costs (as a percentage of total segmental revenues) increased 20 basis points to 72% in the reported quarter.

The International Rental Car segment generated revenues of $433 million, down 7% year over year. Segmental revenues were flat excluding foreign currency impact. Total revenue per transaction day (RPD) dipped 2% to $42.56 million.

Segmental direct vehicle operating and selling, general and administrative costs (as a percentage of total segmental revenues) rose to 78% from 77% a year ago. Revenues from all other operations dropped 9% to $154 million.

Hertz Global Holdings, Inc Price, Consensus and EPS Surprise

 

Hertz Global Holdings, Inc Price, Consensus and EPS Surprise | Hertz Global Holdings, Inc Quote


Balance Sheet and Cash Flow

Hertz Global exited the first quarter with cash and cash equivalents of $554 million compared with $1.13 billion at the end of 2018. Restricted cashat the end of the quarter totaled $452 million compared with $283 million at the end of 2018.

As of Mar 31, 2019, total debt amounted to $17.26 billion compared with $16.32 billion as of Dec 31, 2018. Cash flows provided by operating activities during the first quarter totaled$514 million compared with $401 million in the prior-year period.

Zacks Rank & Other Key Picks

Hertz Global carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader Transportation sector include CSX Corporation CSX, GATX Corporation GATX and SkyWest, Inc. SKYW. While SkyWest sports a Zacks Rank #1 (Strong Buy), CSX and GATXcarry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Each of the companies flaunts a stellar earnings history. While SkyWest and GATX have surpassed estimates in all the trailing four quarters, CSX beat estimates in three of the last four quarters.

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