Hertz Grows Q4 Revenues Amid Higher Expenses
Hertz reported record fourth quarter 2013 worldwide revenues while net income shrunk on lower pricing and higher fleet expense.
Hertz Global Holdings Inc. has reported a record fourth quarter 2013 worldwide revenues of $2.6 billion, an increase of 10.2% year-over-year. The adjusted net income in Q4 2013 was $121.1 million, compared to $139.1 million in the same period of 2012.
For the fourth quarter, U.S. car rental revenues increased 14.1% year-over-year to $1,476.3 million, says Hertz. This was primarily due to Dollar Thrifty, which was acquired on Nov. 19, 2012, and partially offset by the December 2012 divestiture of Advantage. For U.S. off-airport locations, total revenues for Q4 increased 9.8% year-over-year.
The U.S. average number of company-operated vehicles for Q4 was 472,200, an increase of 22.4% over the prior year period, largely due to the acquisition of Dollar Thrifty, says Hertz.
"In a difficult fourth quarter, we achieved an adjusted earnings per share of $0.26 despite an estimated $0.12 impact of lower than expected pricing and higher expenses related to carrying extra fleet," said Mark P. Frissora, Hertz’s chairman and chief executive officer. "However, 2013 was another record-setting year for Hertz on both revenues and profits. We achieved a fourth consecutive year of 20%+ adjusted pre-tax income and EPS growth in 2013, on revenues which increased 19.4%."
However, Hertz missed Wall Street analysts’ projected targets for earnings per share and revenue in the fourth quarter 2013, while Hertz has adjusted earnings per share below previous estimates for the first quarter in 2014 and full year.
For the full year 2013, Hertz’s worldwide revenue was $10.8 billion, an increase of 19.4% over the prior year. U.S. car rental revenues for the year increased 29.2% to $6.3 billion. Full year 2013 adjusted net income was $749.6 million, an increase of 27.3% from 2012, according to Hertz.
Hertz forecasts full year 2014 revenues in the range of $1.14 billion to $1.17 billion based on U.S. and International RAC revenue growth forecasted between 6% and 8% and 5% to 7%, respectively.
“In January and February, we were pleased with higher-than-anticipated Hertz U.S. RAC airport demand and pricing, attributable to two increases we instituted early last December, despite carrying extra fleet,” said Frissora. “Our 2014 guidance range reflects a balanced, current assessment of residual value risks, pricing and demand sensitivities. We intend to close the guidance range as the year unfolds."
Hertz also announced today that its board of directors has approved plans to separate the Hertz car and equipment rental businesses into two independent, publicly traded companies. Additionally, the Hertz Board approved a new share repurchase program totaling $1 billion.
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