Car rental company Hertz Global (NASDAQ:HTZWW) saw its shares tumble premarket after it reported a wider-than-expected quarterly loss and missed revenue estimates.
The company’s fourth quarter loss per share was $1.18, considerably over analysts’ expectations of a $0.65 loss. Revenue was $2.04 billion, also below the consensus estimate of $2.13 billion.
Hertz’s shares fell 11% as investors digested the disappointing results.
Hertz said it was focused on maximizing revenue per unit (RPU) by driving a higher mix of premium rentals while keeping fleet capacity in line with demand. Its RPU decline narrowed from 7% in the first quarter of 2024 to just 1% in the fourth quarter.
Vehicle depreciation improved 19% year on year in the fourth quarter. The company had a $245 million loss from selling electric vehicles in late 2023 that did not recur this year, though higher-than-normal fleet reductions partially offset this benefit. Hertz expects its fleet rotation to be substantially complete by the end of 2025, with depreciation per unit (DPU) settling below $300.
Direct vehicle and operating expenses rose 2% year on year, driven by higher insurance costs and additional non-cash rent expenses. Meanwhile, selling, general, and administrative expenses improved 9% due to lower personnel and advertising costs. Adjusted corporate EBITDA loss narrowed to $357 million.
CEO Gil West said the company is focused on “stabilizing the business and implementing fundamental changes” to transform Hertz, adding that fleet strategy improvements will help the company operate more efficiently while enhancing customer choice.
The company’s ongoing operational transformation is expected to be substantially completed by the end of 2025.