Challenges in the EV segment continued to weigh on the stock.
Shares of Hertz Global Holdings (HTZ -19.31%) were tumbling today after the car rental giant posted disappointing results in its first-quarter earnings, as the company continued to experience challenges with its EV fleet.
As a result, the stock was down 19.8% as of 3:28 p.m. ET.
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Hertz is still short-circuiting
Hertz’s revenue in the quarter rose 2% year over year to $2.1 billion, which topped estimates at $2.04 billion. Total transaction days rose 9% due to strength in the leisure and rideshare channels, while retail price per day fell 7% to $56.68.
The big issue facing Hertz came on the cost side, as the company said it now planned to sell 30,000 EVs, up from the 10,000 it had announced earlier, as it decreases its exposure to the electric vehicle market. Hertz took a $195 million vehicle depreciation charge on the EVs held for sale, and direct operating expenses rose 3% due to inflationary pressure and damage-related expenses.
On the bottom line, the company reported an adjusted net loss of $392 million, or a loss of $1.28 per share, which compared to an adjusted profit per share of $0.39 in the quarter a year ago, and estimates of a loss of $0.44 per share.
CEO Gil West didn’t hide from the challenges, saying of the fleet and direct operating costs, “We’re tackling both issues — getting to the right supply of vehicles at an acceptable capital cost, while at the same time driving productivity up and operating costs down.”
What’s next for Hertz?
Hertz didn’t offer guidance in the press release, but the company should eventually overcome the EV-related headwinds, and the modest top-line growth is a positive sign.
I wouldn’t call this a buying opportunity yet, but Hertz should be able to bounce back over the longer term.
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
