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Hertz Reports Year-Over-Year Second Quarter Improvements

Including record U.S. car rental adjusted pre-tax income for the second quarter, Hertz Global Holdings established several second quarter earnings records.

by Staff
July 30, 2012
3 min to read


Hertz Global Holdings Inc. reported second quarter 2012 worldwide revenues of $2.2 billion, an increase of 7.4% year-over-year — a 10.3% increase excluding the effects of foreign currency.

Worldwide car rental revenues for the quarter increased 6.8% year-over-year (a 9.9% increase excluding the effects of foreign currency) to a record $1,889.6 million.

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Second quarter 2012 adjusted net income was a record $154.4 million, versus $116.6 million in the same period of 2011.

"We delivered strong revenue and earnings growth again in the second quarter of 2012, and achieved several record results, despite moderate global GDP growth,” said Mark P. Frissora, the company's chairman and CEO. “Our second quarter 2012 results are a testament to fostering a culture of continuous improvement as we delivered a 390 basis point improvement in direct operating expenses and $107 million in incremental efficiency savings for the quarter."

Worldwide Car Rental

Hertz globally achieved record transaction days for the quarter, which increased 7% over the second quarter of 2011 — 10.1% U.S.; 0.1% International.

U.S. off-airport total revenues for the second quarter increased 12.5% year-over-year, and transaction days increased 17.4% from the prior year period. Worldwide rental rate revenue per transaction day ("RPD") for the quarter decreased 3.4% — 3.1% U.S.; 3.2% International — from the prior year period.

RPD continues to be impacted by the shift in Hertz’s mix between airport and off-airport rentals, the company reported.

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Worldwide car rental adjusted pre-tax income for the second quarter of 2012 was a record $277.4 million, an increase of $35.2 million from $242.2 million in the prior year period. The result was driven primarily by increased volume, strong cost management performance and lower net depreciation per vehicle, partially offset by a decrease in RPD. As a result, worldwide car rental achieved a record adjusted pre-tax margin of 14.7% for the quarter, versus 13.7% in the prior year period.

The worldwide average number of company-operated cars for the second quarter of 2012 was 656,200, an increase of 34.7% over the prior year period, largely as a result of the Donlen acquisition, and a 4.6% increase year-over-year excluding the effects of the Donlen acquisition.

Commenting on the results of the company's car rental business, Mark Frissora said, "U.S. rent-a-car continues to generate record operating results and we are especially pleased by the performance of the Advantage brand which grew revenues approximately 42% in the second quarter."

Revenues from worldwide equipment rental for the second quarter were $335 million — up 11.0% year-over-year (a 13.1% increase excluding the effects of foreign currency), driven by an 18.8% revenue increase in the U.S. and 15.2% in North America.

Adjusted pre-tax income for worldwide equipment rental for the second quarter of 2012 was $42.5 million, an improvement of $9.1 million from $33.4 million in the prior year period.

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Outlook

The company reaffirms its full-year 2012 revenues, corporate EBITDA, adjusted pre-tax income, adjusted net income and adjusted diluted earnings per share guidance provided on May 2, 2012. The company expects to generate worldwide revenues in the range of $8.9 billion to $9 billion, corporate EBITDA in the range of $1.6 billion to $1.66 billion, adjusted pre-tax income in the range of $870 million to $940 million, adjusted net income in the range of $570 million to $620 million and adjusted diluted earnings per share in the range of $1.28 to $1.38 (based on 450 million shares).



To see when other company's will release second quarter results or to see first quarter results, click here.

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