Hertz revenue fell in the third quarter due to its so-called “back to basics” strategy and “operational transformation” characterized by fleet reductions, which executives said on an earnings call on Tuesday are “on track” to be completed by the end of 2025. .
The company reported a net loss of $1.33 billion in the third quarter, down from a profit of $629 million a year ago. Revenue was $2.58 billion, down approximately 5% year over year.
Hertz Chief Financial Officer Scott Haralson said the number of trading days in the third quarter fell 4% year-over-year to 41,300, with daily revenue slipping to $62.63 from $63.04 in the third quarter of 2024, and “Non-cash asset impairment charges of just over $1 billion” were cited as some of the reasons for the weak performance. He said the impairment charge delayed the company's earnings release date primarily due to “a decline in fleet residual values over the past year or so.”
The fleet reduction is a key component of the company's strategy to help ensure supply remains within demand.
“We believe we can achieve the same number of trading days with a smaller fleet, which will also benefit our cost structure,” Hertz CEO Gil West said, adding that the The company has accelerated fleet rotation and established a new vertical during the quarter dedicated to end-to-end fleet management.
Hertz's average number of leaseable vehicles fell 2% year over year in the third quarter to approximately 550,100 vehicles. Furthermore, Haralson said electric vehicles “currently account for less than 10% of the fleet.” “We've completed most of the rotation. The remaining electric vehicles are strategically placed across our fleet, so we're comfortable with those levels.”
Hertz announced in January 2024 20,000 cars for sale from its U.S. electric vehicle fleet, then in April increased this number Another 10,000.
Americas business third-quarter revenue fell 5% year-on-year to nearly $2.1 billion. Average available vehicles in the Americas fell 2% to 432,600. The vehicle utilization rate was 82%, down from 84% in the same period last year. Trading days fell 5% to approximately 32.7 million days.
The International segment reported a 3% revenue decline to $514 million, with vehicle utilization holding steady at 80%, leaseable vehicles down 2% to 117,500 vehicles, and an RPD of $60.45 compared to $61.47 in the third quarter of 2023.
