Hertz Global Holdings, Inc (NYSE:HTZ) stock has lost almost half of his value after the company posted worse-than-expected quarterly report and cut its full-year profit outlook for the year.
Hertz Global, which operates Hertz, Dollar, and Thrifty vehicle rental brands, posted adjusted earnings of $1.5 per share in the third-quarter, missing analysts’ estimates of $2.73 significantly. Revenue was $2.54 billion, compared with analysts’ estimates of $2.59 billion.
“A customary vehicle depreciation rate review near the close of the third quarter resulted in a substantial depreciation adjustment, particularly on compact and mid-sized vehicles,” said CEO John Tague in an earnings release. He added the company expected more adjustments in the current quarter.
The company now expected adjusted profit of 51 cents to 88 cents per share for the year, compared with its earlier estimate of $2.75-$3.50 per share. The stock dropped as much as 38 percent to $22.15 in the early trading.
“However, our near-term financial performance continues to be uneven,” said Tague in the release. “A customary vehicle depreciation rate review near the close of the third quarter resulted in a substantial depreciation adjustment, particularly on compact and mid-sized vehicles, that together with rental volume at the low end of our expectations as well as higher net operating and administrative expenses impacted our performance.”