Hertz Global Holdings (NYSE: HTZ) stock dropped today as their earnings release fell almost double of analyst predictions.
After the trading day on Monday, Hertz reported a 4% loss in total revenues, for Q1 2017 it is 1.3B in the same time last year, it revenues were 1.4B for Q1 2016. Earnings also reported a $132M loss of income due to the continuing cost of operations and only a $22M loss in Q1 of 2016 which translates to a difference of a 500% difference!
According to Thomas Reuters, the company reported a first quarter earnings loss, excluding items, of $1.61 per share on sales of $1.92 billion. The Street was anticipating Hertz to post a much smaller loss for the quarter of 91 cents on better sales of $1.94 billion, according to Thomson Reuters.
The Adjusted Corporate EBITDA for U.S. RAC was a negative $104 million, or a $130 million decline from Q1 of 2016. The earnings report states that the decline in EBITDA was due in part by adding fleet investments, realignment of vehicles initiative and IT spending service improvements and brand development. Their International market also did not fare well: The Company's International RAC segment revenues were decreased by 5% from Q1 2016 which was $411 million in first quarter 2017 this figure does not consider the $6 million unfavorable impact of foreign currency exchange rates, the revenues decreased 4% driven by a 4% decrease in Total RPD, as well as a partially offset of about 1% increase in transaction days. The decline in the International RAC revenues reflect a tougher year-over-year comparison due to the additional Leap day in 2016, the Easter shift to second quarter in 2017, in addition to the termination of certain contracts in the third quarter of 2016.
Although Hertz did make a 6% increase from $144m in revenues of Q1 2016 to $152m in Q1 of 2017 for all of their other operations, this was minutia compared to the losses that may have shocked their stocks prices toward a downward trajectory.
Kathryn V. Marinello, president and chief executive officer of Hertz sates: "As previously outlined, we are executing on a turnaround plan that puts our customers at the center of everything we do,…"Our goal is to strengthen the business to drive predictable, sustainable growth over the long term. While we are mindful of today's headwinds related to used car residual values, our commitment to investing in the business remains steadfast. In particular, we are placing significant emphasis on fleet quality, the customer experience, brand development and systems transformation. These investments are critical to rebuilding our position as a leader in the global rental car market. While our performance doesn't yet reflect our investments and may continue to be uneven, we are seeing signs of progress."