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Hertz Posts Stronger-Than-Expected Earnings as Travel Rebounds

Hertz revenue soared 76% in the third quarter on a rebound in travel. The stock is higher.
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Hertz Global  (HTZZ) - Get HERTZ GLOBAL HOLDINGS INC Report shares rose on Thursday after the iconic rental-car chain reported stronger-than-expected third-quarter results, benefiting from the recovery in travel.

The coronavirus pandemic sent the Estero, Fla., company into bankruptcy proceedings last year, but it emerged in June and has come back with a vengeance.

Hertz shares recently traded at $27.50, up 1.8%. They have traded on Thursday up as much as 5.5% at $28.50. And they've skyrocketed 82% in the past three months as investors expressed enthusiasm for the company’s fortunes.

Profit totaled $571 million, or $1.13 a share, swinging from a loss of $222 million, or $1.42 a share, in the pandemic-hammered year-earlier period. Analysts surveyed by FactSet expected 85 cents in the latest quarter.

Revenue soared 76% to $2.23 billion in the third quarter from $1.27 billion a year earlier. The FactSet analyst consensus called for $2.23 billion.

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The improvement "reflects the continued rebound in leisure travel and tight fleet inventory as Hertz executes against its strategic road map,” it said.

“While volume continued to be lower compared to 2019 levels, these headwinds were partially mitigated by improvements in pricing power. 

"Adjusted [earnings before interest, taxes, depreciation and amortization] reached a record $860 million, and the company achieved a record 39% margin for the third quarter.”

Hertz ended the third quarter with $1.5 billion in non-vehicle debt outstanding

Earlier this week, Hertz said it was buying 100,000 electric vehicles, valued at $4.4 billion, from Tesla  (TSLA) - Get Tesla Inc Report.

This purchase marks Hertz’s first big push to electrify its fleet since it emerged from bankruptcy proceedings. Hertz said it would install thousands of chargers in its location network.