Hertz Global Holdings saw increasing rental activity in the second quarter, and found itself short on vehicles because of the increased number of recalls by the automakers, the company said Tuesday.
Total revenue increased 4% for Hertz compared to the second quarter of 2013, yet investors sold shares after Hertz withdrew its full-year financial forecast. On Wednesday, Hertz shares fell nearly 4% on Wednesday to close at $30.32.
Transaction days in the quarter "were tempered by already tight fleets in the face of rising OEM recall activity, which limited the company's ability to convert demand into transaction days," the company reported in an SEC filing.
As recall activity ramped up in April, Hertz saw its efficiency levels fall from 81% in March to 79% for the second quarter. Hertz scrambled to fulfill advance reservations and contracted business, which left the company "without inventory" for higher-rate leisure close-in rentals, Hertz reported.
At Hertz airport locations, total revenue per day increased 5% on a 3% decline in transaction days. The impact of recalls on Hertz business fell to a more normalized level by the middle of the third quarter, Hertz said.
While preparing for the first quarter 2014 report, Hertz’s Audit Committee of the Board of Directors identified certain errors in the financial statements for 2011; they could no longer be used and had to be restated. In addition, Hertz also needed to fix the 2012 and 2013 financial statements to reflect these errors.