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Hertz Earnings: A Tale of Two Half Quarters

In the U.S., year-to-date February 2020 revenue was up 8% from the same period in 2019 on both higher price and volume. By March 31, revenues had eroded 9.7% for the entire quarter compared to last year.

May 12, 2020
Hertz Earnings: A Tale of Two Half Quarters

All three brands — Hertz, Dollar, and Thrifty — contributed to a 2% increase in Total RPD in the first quarter, which partially offset the volume impact to revenue.

Photo via Depositphotos.

2 min to read


Hertz Global Holdings, Inc. reported results yesterday for the first quarter of 2020.

Total revenues of $1.923 for the first quarter represent a 9.7% drop compared to last year’s first quarter of $2.107 billion. Net loss was $356 million, compared to a loss of $147 million in the first quarter of 2019.

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In the U.S., year-to-date February 2020 revenue for the segment was up 8% from the same period in 2019 on both higher price and volume. Travel bans and shelter-in-place orders throughout the country severely impacted volume in March which drove an 11% decline in transaction days for the quarter.

Utilization dropped to 66% in this quarter from 75% last year. Revenue per day was a bright spot, coming in at $42.35 compared to $42.25 in last year’s quarter. However, revenue per month dropped from $934 to $846 this year.

All three brands — Hertz, Dollar, and Thrifty — contributed to a 2% increase in Total RPD in the first quarter, which partially offset the volume impact to revenue.

Depreciation per unit, per month was impacted by residual values on certain vehicle models and lower year-over-year retail sales volume as a result of the COVID-19 shut-down of retail lots.

"We started the year with positive momentum, extending the strong growth trajectory of the past three years, reflecting consistent increases in both price and volume, productivity improvements and best-in-class fleet management," said CEO and President, Kathryn V. Marinello, in a statement.

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"Yet in just two months, the outbreak of the coronavirus created a major business disruption as global travel demand dropped to almost zero and the U.S. used-car market effectively shut down. We immediately shifted our business priorities to focus on employee and customer safety, expense mitigation and preserving liquidity."

Hertz underwent aggressive cost-cutting measures in the quarter, including shedding a third of its global workforce. The company ended with about $1 billion of unrestricted cash and cash equivalents at March 31.

While the company missed lease payments due April 27, it was given a temporary lifeline until May 22 by lenders. While Hertz says it is reviewing options to preserve liquidity, “there can be no assurance that the company will be able to successfully negotiate any relief past May 22.”

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