Hertz Global (HTZ 12.51, -2.40) has tumbled 16.1% in pre-market after its quarterly results missed expectations. The disappointing report comes after peer Avis Budget (CAR 26.75, -0.65) also missed market estimates, sending shares to a one-year low. As for Hertz, today's loss has extended its year-to-date decline to 42.0%.
The auto rental agency reported a below-consensus first quarter loss of $1.61 per share on a 3.4% year-over-year decline in revenue to $1.92 billion, which was also shy of estimates.
U.S. rental revenue declined 4.0% year-over-year to $1.40 billion with transaction days declining 1.0%. The decline was partially due to Leap day in 2016. Furthermore, the shift of Easter into the second quarter also made a negative contribution to revenue growth. Average pricing declined 3.0% to $41.19 as the company fought for customers in a weak business environment. Net vehicle depreciation per unit per month jumped 15.0% year-over-year to $348, due to seasonally weak residual trends. Utilization declined 3.0%. Adjusted EBITDA for the U.S. segment declined $130 million year-over-year to a loss of $104 million.
International rental revenue fell 5.0% to $411 million despite a 1.0% increase in transaction days. Leap day in 2016 and the shift of Easter into the second quarter made negative contributions to revenue growth. Average pricing declined 4.0% to $39.38.
The company sold 21.0% more vehicles than it did one year ago despite lower used car prices. This is a near-term positive, but the company will need to maintain sales levels in order to allay concerns about falling used vehicle prices and their impact on the rental business.