Hertz (NASDAQ:HTZ) reported a smaller adjusted loss for the second quarter on Thursday, as higher rental pricing and solid commercial performance helped boost revenue despite ongoing vehicle recalls and a slightly smaller fleet. The company said its turnaround strategy continues to deliver encouraging progress.
Adjusted net loss narrowed to $47 million, or $0.11 per diluted share, compared with a loss of $91 million, or $0.29 per share, in the same period last year.
Revenue increased 10% year over year to $2.40 billion, while adjusted corporate EBITDA improved to $81 million, exceeding the upper end of the company’s revised guidance.
Core rental business continues to improve
Hertz said its transformation programme remains focused on strengthening profitability in its core car rental operations while expanding higher-value businesses such as fleet management, vehicle services and broader mobility solutions.
Chief Executive Gil West said disciplined execution and strong commercial performance helped drive operational improvements, despite operating a fleet that was 1% smaller than a year earlier.
Revenue per unit rose 8% from the prior year, while revenue per rental day increased 9% as pricing remained strong.
Vehicle utilisation improved to 79%, or 81% excluding the impact of recalls, while the spread between revenue per day and direct operating expenses widened by 17% for the third consecutive quarter.
Vehicle recalls continue to weigh on results
The company said elevated recall activity remained one of its biggest operational challenges during the quarter.
On average, nearly 15,000 vehicles were affected by recalls, roughly three times more than in the same period last year.
Management estimated that recall-related disruptions reduced GAAP net income by approximately $27 million and lowered adjusted EBITDA by around $30 million during the quarter.
Company maintains full-year targets
Looking ahead, Hertz expects full-year revenue per unit to exceed its long-term objective of $1,500 and reaffirmed its target of keeping full-year net depreciation per unit at or below $300.
The company ended the quarter with liquidity of $984 million and said it remains well positioned to finance its ongoing transformation strategy.