Hertz Swings to Quarterly Loss on Continued Revenue Weakness

Hertz Global Holdings Inc. swung to a loss in the June quarter as it reported its fourth straight revenue decline, driven by continued weakness in its car-rental business.

The Florida company, which has been trying to turn around operations after accounting errors forced it to adjust financial results starting in 2011, on Monday revised its financial projections for the year to account for the separation of its equipment-rental business, completed in June.

Hertz now projects $2.75 to $3.50 a share in adjusted profit and $850 million to $950 million in adjusted corporate earnings before interest, taxes, depreciation and amortization. It had previously guided for $1.6 billion to $1.7 billion in adjusted corporate Ebitda, which included $600 million to $650 million from the equipment-rental unit.

Shares, down 17% this year, fell 1.7% to $46.50 in after-hours trading.

Over all, Hertz reported a loss of $43 million, or 51 cents a share, compared with a profit of $36 million, or 39 cents a share, a year earlier. Excluding restructuring costs, debt-related charges and other items, Hertz reported a profit of 69 cents a share, down from $1.19 a share a year earlier.

Adjusting for the separation of the equipment-rental business, the loss from continuing operations was $28 million, or 33 cents a share, compared with a profit of $13 million, or 14 cents a share, a year earlier. Adjusted profit fell to 41 cents a share, from 80 cents a share a year earlier.

Revenue fell 2% to $2.27 billion, driven by lower rental rates in the U.S.

Analysts surveyed by Thomson Reuters had projected 31 cents a share in adjusted profit on $2.27 billion in revenue.

Hertz said it had cut about $100 million in expenses during the quarter and remained on track to meet its $350 million cost-cutting target for the year.

In 2015, it cut about $230 million in expenses, above its target.

The company, which used the bulk of the proceeds from the equipment-rental spinoff to pay debt, ended the quarter with about $1.29 billion in cash and $15.39 billion in debt.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

August 08, 2016 21:25 ET (01:25 GMT)

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