Hertz Reports Net Loss of $158M

For the second quarter 2017, Hertz Global Holdings Inc. has reported its total revenues as $2.2 billion, a 2% decline versus second quarter 2016.

Adjusted earnings for Q2 were $35 million compared to $184 million in the same period last year, according to Hertz.

For the second quarter, Hertz reported a net loss (from continued operations) of $158 million, including $54 million of impairment charges. This is compared with a net loss of $28 million during the same period last year. On an adjusted basis, Hertz’s net loss was $52 million compared with a net income of $35 million in Q2 2017.

For the U.S., Hertz’s total RAC revenues were $1.5 billion in Q2, a decrease of 4% from last year. Transaction days decreased by 3% year-over-year compared to a strong second quarter 2016, which was driven by replacement rentals from high customer vehicle recall activity. According to Hertz, pricing decreased by 2% in Q2 — driven by a change in customer mix year-over-year and weaker ancillary revenues. Adjusted earnings for Q2 were negative $22 million, versus positive $168 million in the same period last year.

"We have made significant progress in the first half of the year, executing on our operating turnaround plan,” said Kathryn V. Marinello, president and CEO of Hertz. “Of course, the hard work always comes before the pay off as reflected in our second quarter results, where increased spending to fix areas of weakness and invest in areas of opportunity were exacerbated by a challenging vehicle residual environment in the U.S.”

“On the upside, we have now completed our U.S. fleet transformation, redesigned 37 Hertz airport locations for Ultimate Choice, updated our financial and revenue management systems, and introduced new management tools and resources to drive service excellence,” added Marinello. “Admittedly, we still have a lot of work to do, but these early wins are evidence that we have the right plan in place to ultimately achieve best-in-class outcomes."

In Q2, U.S. RAC net vehicle depreciation per unit per month increased 27% to $353, primarily driven by declining residual values and accelerated vehicle disposition timing. Hertz continued its fleet optimization plan by selling 35% more vehicles year-over-year, according to the company. U.S. vehicle utilization declined by 130 basis points in Q2.

Hertz’s total international RAC revenues were $543 million in Q2, an increase of 1% from Q2 2016. Excluding an $18 million impact of foreign currency exchange rates, revenues increased 4% due to a 6% increase in transaction days, partially offset by a 1% decrease in total revenue per transaction day (RPD), according to Hertz.