Hertz Global (HTZ 20.25, +0.25) has added 1.3% in pre-market action despite reporting disappointing results for the fourth quarter.
The car rental agency reported a below-consensus loss of $0.71 per share on a 0.9% year-over-year decline in revenue to $2.01 billion, which was close to expectations. The earnings miss has not weighed on the stock, but it is worth noting that shares of HTZ stumbled on February 16 when peer Avis Budget (CAR 33.23, 0.00) reported disappointing results, priming the market for a similar report from Hertz Global.
Adjusted earnings before interest, taxes, depreciation, and amortization declined 87.0% year-over-year to $12 million.
Hertz management acknowledged disappointing performance in 2016, blaming it on issues surrounding the company's fleet and service. The company is upgrading the quality and mix of its US fleet, which should improve future performance.
U.S. rental revenue was little changed year-over-year at $1.42 billion. Transaction days grew 1.0% while pricing decreased 1.0%. Vehicle carrying costs increased 23.0%, which was fueled by a decline expected in residual values for current and future sales. Per unit net vehicle depreciation rose 19.0% to $321 per unit/month.
International rental revenue declined 6.0% to $441 million. Transaction days increased 1.0% while pricing declined 5.0%. Per unit net vehicle depreciation increased 1.0% due to a decline in residual values, which was offset improved fleet management and greater use of alternative disposition channels.
Other revenue, which is derived mostly from Donlen leasing, increased 4.0% to $151 million.