Hertz Reports Loss for 2nd Quarter
Hertz Global Holdings, the car hire company, has posted better results for the 2nd quarter than expected. This is due to higher sales volumes as businesses begin to spend more. However, the company still reported a US$25.1 million net loss for the period, which is compared to the US$3.9 million net income they reported for the same time last year.
Adjusted earnings were posted as 14 cents per share, while revenue increased to US$1.9 billion, a 7.1% rise. Analysts had expected earnings of 13 cents per share and revenue of US$1.89 billion.
Due to these figures, Hertz has reaffirmed their forecast for the full year and raised expectations. They increased their cost savings projections from US$300 million to US$380 million. They also predict that revenue will be between US$7.5 billion and US$7.7 billion, while adjusted earnings are thought to be between 43 and 45 cents per share.
Hertz chairman and chief executive Mark Frissora said that compared to the second quarter of 2007, before the recession, RAC in the US generated US$32.5 million more than adjusted pretax income this year. This represents a 350 bps margin improvement from 2007 on revenues that are 7% lower, he explained. They have greatly cut their fleet and other costs while investing in 298 new off-airport locations and 31 Advantage airport venues since April of last year, he continued.
Frissora continued that US car rentals generated more than 10% revenue growth, while inbound, corporate and off-airport locations have had double-digit increases in revenues. This is due to their diversified worldwide growth strategy, he added, and a year-over-year increase in adjusted pretax income by 18.6%.
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