Hertz Global Holdings HTZ is scheduled to release fourth-quarter 2021 earnings on Feb 23, after market close.
Hertz Global, which emerged from a pandemic-induced year-long bankruptcy last year, has witnessed the Zacks Consensus Estimate for fourth-quarter earnings being revised 4% downward over the past 60 days to 73 cents. The consensus mark for the December quarter revenues is currently pegged at $1.98 billion.
Against this backdrop, let’s discuss the factors that might have impacted Hertz Global’s performance in the December quarter.
With the gradual resumption of economic activities, the Americas Rental Car segment (which includes operations from Canada, Latin America, the United States and the Caribbean) is likely to have performed well in the to-be-reported quarter despite omicron-led disruptions.
Favorable pricing for rental cars and used vehicles is expected to have boosted the fourth-quarter segmental results. This is likely to have boosted the top line as the Americas Rental Car unit accounts for most of HTZ’s top line.
However, performance of the international Rental Car segment is likely to have suffered in the fourth quarter, mainly due to omicron-induced woes, which might have hurt rental car demand. Moreover, high total costs are likely to have hurt the bottom line in the to-be-reported quarter. Costs are likely to have been bumped up by escalated direct vehicle and operating expenses in the Americas Rental Car unit.
What Does the Zacks Model Say?
Our proven model does not predict an earnings beat for Hertz Global this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Hertz Global has an Earnings ESP of -13.40% as the Most Accurate Estimate is 10 cents below the Zacks Consensus Estimate of 73 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Hertz Global currently carries a Zacks Rank #3.
Highlights of Q3 Earnings
Hertz Global's third-quarter earnings (excluding 7 cents from non-recurring items) of $1.20 per share surpassed the Zacks Consensus Estimate of $1.01. Total revenues of $2,226 million, however, missed the Zacks Consensus Estimate of $2,384.5 million
Within the broader Transportation sector, the likes of CSX Corporation CSX, Canadian National Railway CNI and GATX Corporation GATX reported fourth-quarter 2021 results last month.
CSX reported fourth-quarter 2021 earnings of 42 cents per share, which surpassed the Zacks Consensus Estimate by a penny. The bottom line improved in double digits year over year owing to higher revenues.
CSX’s total revenues of $3,427 million outperformed the Zacks Consensus Estimate of $3296 million. The top line augmented 21.3% year over year owing to growth across all its businesses as well as revenues from Quality Carriers, which the company acquired in July 2021.
Canadian National reported fourth-quarter 2021 earnings (excluding 2 cents from non-recurring items) of $1.36 per share (C$1.71), which surpassed the Zacks Consensus Estimate of $1.21. The bottom line increased in double digits year over year on lower costs.
Canadian National’s quarterly revenues of $2,977.4 million (C$3,753 million) topped the Zacks Consensus Estimate of $2,917.4 million. The top line improved year over year, driven by higher freight rates and fuel surcharges.
GATX reported fourth-quarter 2021 earnings (excluding 11 cents from non-recurring items) of $1.58 per share, which surpassed the Zacks Consensus Estimate of $1.07. The bottom line surged more than 200% year over year.
GATX’s total revenues of $321 million increased 5.3% year over year, mainly owing to a 5.2% rise in lease revenues, which came in at $288.4 million. Lease revenues contributed 89.8% to the top line.
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