Hertz Global (HTZ 18.29, +2.00, +12.28%) spiked 15% in pre-market
after reporting better than expected results. Today's results from Hertz come
three days after industry peer Avis Budget (CAR 32.00, -0.27, -0.84%) reported
below-consensus earnings and revenue for the third quarter.
The vehicle rental company reported above-consensus third quarter earnings of $2.14 per share on a 7.2% year/year increase in revenue to $2.76 bln, which was also ahead of estimates.
Hertz President and CEO Kathryn Marinello said the company's operational performance is improving in steady fashion, pointing to four consecutive quarters of year/year revenue and earnings growth.
Looking at the segment breakdown, revenue in the U.S. division grew 9.9% to $1.85 bln thanks to a 7.1% year/year increase in transaction days and higher pricing, which led to a 2.6% increase in revenue per day (to $46.23). Revenue per unit/per month grew 3% to $1,152. Vehicle utilization improved by 30 bps to 81% while average vehicle count jumped 6.6% to 527,900. Net depreciation per unit per month fell 14.7% to $261 due to favorable vehicle acquisition prices and stronger residual values. Segment pre-tax profit grew 25.3% to $208 mln. Lower vehicle holding costs and revenue growth outweighed higher corporate expenses and vehicle interest expenses.
International revenue increased 0.5% to $732 mln. Transaction days declined 0.4% while net depreciation per unit/per month increased 3% to $205. Vehicle utilization fell 120 bps to 80%, but the company was able to realize higher pricing. Revenue per day increased 2.9% to $47.37 while revenue per unit/per month rose 1.3% to $1,166. Average vehicle count grew 1.1% to 214,900. Growth in the international segment was driven by strength in Asia-Pacific while growth in Europe was more subdued. Segment pre-tax profit fell 11.4% to $140 mln.
Other revenue increased 9.4% to $174 mln while pre-tax profit increased 5.6% to $19 mln. Average vehicle count in the Donlen operation declined 9.9% to 185,300.
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