Hertz Global reported a bigger decline in third-quarter revenue than expected while swinging to a per-share loss and recording a $1 billion write-down due to lower fleet residual values. The car rental company saw its revenue dip to $2.58 billion for the three months ending September 30, down from $2.7 billion a year prior, missing the average analyst estimate of $2.68 billion on Capital IQ.
Revenue per day dipped by 1%. Chief Financial Officer Scott Haralson shared insights during a conference call, stating, "Lower market rates were supported by a deliberate strategy to drive better RPD mix." Hertz reported an adjusted loss per share of $0.68, down from a profit of $0.70 a year ago, contrasting with the Street's expectation of a $0.47 loss.
The company’s GAAP results included a $1 billion impairment charge that reflected lower fleet residual values and adjustments linked to an accelerated fleet rotation initiative. In a strategic shift, Hertz announced earlier this year plans to sell 20,000 electric vehicles, following a deal to acquire 100,000 vehicles from Tesla two years ago.
In April, it confirmed plans to sell an additional 10,000 EVs. Haralson indicated that electric vehicles represent less than 10% of the current fleet, stating, "The remaining EVs are strategically placed in our fleet, so we're happy with those levels." He also communicated the company's intent to operate with fewer vehicles overall, underscoring the potential benefits: "Reducing our fleet 1% while producing the same number of transaction days could reduce our expenses by more than $30 million annually, decrease our cash outlay by over $20 million, and cut our debt by more than $100 million.".