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Hertz Q3 Revenue Rises Slightly

For the third quarter 2017, Hertz Global Holdings Inc. has reported its total revenues as $2.6 billion, a 1% increase year-over-year. CEO Kathryn Marinello is encouraged by Hertz’s process but admits the company still has a lot of work ahead.

by Staff
November 10, 2017
Hertz Q3 Revenue Rises Slightly

Photo courtesy of The Hertz Corp.

3 min to read


Photo courtesy of The Hertz Corp.

For the third quarter 2017, Hertz Global Holdings Inc. has reported its total revenues as $2.6 billion, a 1% increase versus third quarter 2016.

Adjusted earnings for Q3 were $321 million compared to $329 million in the same period last year, according to Hertz.

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For third quarter, Hertz reported a net income (from continuing operations) of $93 million compared to a net income of $44 million during the same period last year. On an adjusted basis, Hertz’s net income was $118 million compared to a net income of $134 million in Q3 2016.

For the U.S., Hertz’s total RAC revenues were $1.7 billion, a decrease of 1% from last year. Pricing increased by 2% driven by pricing actions through revenue management tools and fleet mixes, according to Hertz. Transaction days decreased by 4% year-over-year due to a tighter rental fleet and canceled reservations in hurricane-affected areas. Adjusted earnings for Q3 were $166 million; they were affected by the revenue and depreciation outcomes and $11 million in incremental fleet interest expense versus last year.

"Our operating turnaround plan, focused on growth through enhanced fleet, service, brands and technology, is showing encouraging progress, evidence that Hertz is on the right strategic path," said Kathryn V. Marinello, president and CEO of Hertz. "While there is still a lot of work ahead of us, in the third quarter, we benefited from continued improvements in our fleet offering, expansion of our Ultimate Choice program, and a strategic focus on optimizing revenue management. We remain committed to building Hertz's long-term success as a leader in the global rental car market by strengthening the business to drive predictable, sustainable long-term growth."

Hertz reduced its total U.S. fleet by 2% during Q3 compared to a year ago. Utilization declined by 130 basis points during the quarter as Hertz continued to balance its focus on service performance with fleet availability, according to the company.

In Q3, Hertz reported its total international RAC revenues as $728 million, an increase of 7% from third quarter 2016. Excluding a $28 million favorable impact of foreign currency exchange rates, revenues grew 2% — driven by a 5% increase in transaction days and partially offset by a 2% decrease in total revenue per day (due to the mix shift in demand toward leisure value brands).

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According to Hertz, the company is encouraged by the progress it made during the quarter, but it recognizes that it still has operational work to do through 2018.

"We are entering a seasonally low period of demand at the same time that we are continuing to invest in the long-term growth of the company," said Marinello. "Expense always precedes benefit. Higher spending levels throughout 2018 are necessary to ensure predictable, sustainable earnings performance, beginning in 2019. In the meantime, we are already seeing some of our strategies and investments paying off.  Others are still a work in progress, and we are revising and iterating continuously toward optimization. Having best-in-class products, services, brands, and technologies will be the culmination of the time, hard work, and investment that we have committed to delivering."

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