Hertz Lowers Rental Revenue Target

Photo courtesy of The Hertz Corp.
Photo courtesy of The Hertz Corp.

Hertz Global Holdings Inc. said that, due to what the company believes is excess industry capacity, it now expects its first quarter and full year 2016 U.S. car rental (U.S. RAC) revenue and consolidated first quarter adjusted earnings per share to be lower than previously expected.

Despite this reduction, Hertz is affirming its full-year 2016 adjusted earnings guidance within a range of $1.6 to $1.7 billion, according to the company.

For the first quarter 2016, Hertz expects U.S. RAC revenue per available car day (RACD) to decline between 2.5% to 3.5% versus the same period last year on low single-digit growth in transaction days.

For the full year 2016, Hertz now expects U.S. RAC total revenue to be flat to 1.5% lower versus the company's previous guidance of 1.5% to 2.5% growth year–over-year, says the company.

Hertz continues to expect modest U.S. RAC transaction day growth in 2016, primarily driven by its on-airport business, according to the company. In addition to maintaining its 2016 adjusted earnings guidance, Hertz provided corresponding full-year adjusted earnings per share guidance of between $0.95 per share and $1.10 per share, which is based on an average of 424 million shares outstanding and a 37% effective tax rate.

"We are disappointed that the pricing pressure experienced late in 2015 further intensified in the first quarter of 2016,” said president and CEO John Tague. “However, we believe that industry capacity will likely moderate as seasonal demand improves establishing the foundation for a relative improvement in pricing as we head into the peak summer season."

Hertz continues to expect to achieve $350 million of incremental savings in 2016. Similar to 2015, the company anticipates a lower rate of savings realization during the first half of the year as targeted initiatives ramp up throughout 2016, according to Hertz.

Comment On This Story

Name:  
Email:  
Comment: (Max. 10000 characters)  
Please leave blank:
* Please note that every comment is moderated.

 
 

Newsletter: Sign up to receive latest news, articles, and much more.

Read the latest

Auto Focus Blog: A blog covering fleets, auto rental and the business of cars

The Problem with Valuing Safety Technology

As advanced safety technologies have migrated to mainstream vehicles, retaining value for these options at resale remains an issue.

ELD Mandate: Is Your Head Still in the Sand?

If you think you have 11 weeks to implement an Electronic Logging Device system to meet the Dec. 18 compliance deadline, you really don’t — for a few reasons.

Who Controls Your Vehicles’ Data?

In the name of security, an automaker’s alliance is advocating denial of third-party access to the OBD-II port. Is this going too far?

Job Finder: Access Top Talent. Fill Key Positions.

>