ESTERO, Fla. - Hertz Global Holdings (OTC:HTZGQ) (NASDAQ:HTZ) shares plunged 7% in early trading Monday after the car rental company reported worse-than-expected third quarter results and took a $1 billion impairment charge on its vehicle fleet.
Hertz posted an adjusted loss of $0.68 per share, wider than analysts' estimates for a $0.46 per share loss. Revenue fell 5% YoY to $2.6 billion, missing expectations of $2.69 billion.
The company recorded a $1 billion non-cash impairment charge on its vehicle fleet during the quarter, citing declining residual values over the past year. Hertz said the timing of the impairment was driven by lower expected cash flow generation from its fleet over the remaining hold period.
"In the third quarter, we continued executing on our efforts to implement our transformation, focusing on our back-to-basics strategy to deliver sustainable, long-term returns for shareholders," said Hertz CEO Gil West.
Vehicle depreciation costs surged 87% YoY to $937 million in Q3. The company expects to substantially complete its fleet rotation by the end of 2025, at which point it anticipates depreciation per unit could normalize to under $300 per month.
Total (EPA:TTEF) revenue per day was relatively flat YoY at $62.63. Vehicle utilization declined slightly to 82% from 83% a year ago.
Hertz ended the quarter with $1.6 billion in corporate liquidity. The company said its operational transformation is ongoing and expected to be substantially completed by the end of 2025.
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