On the Dash:
- Hertz expects Q2 adjusted corporate EBITDA of $50 million to $80 million, near the low end of guidance.
- Used-car softness flipped April vehicle-sale gains into May losses, pushing net DPU to about $300 a month.
- The company plans a $100 million stock offering and a separate $300 million private note offering.
Hertz Global Holdings said Wednesday its second-quarter earnings are tracking toward the low end of its forecast after the used-car market weakened more than expected.
In a regulatory filing, the company said it now expects adjusted corporate earnings before interest, taxes, depreciation and amortization between $50 million and $80 million. That falls within Hertz’s margin expectations but toward the bottom of its prior range.
The company blamed softness in the used-car market for realizing losses on vehicle sales in May, after posting gains in April.
Those losses lifted net depreciation per unit per month, a measure of how much value a rental vehicle loses each month. Hertz said the second-quarter net DPU will run about $300.
The rest of the business held up. The company said fleet size, revenue, revenue per day and rental days should align with or slightly exceed earlier expectations, helped by healthy demand and better-than-expected capacity utilization. Year-over-year growth in revenue per day ran ahead of the first-quarter trend.
The guidance tracks with broader wholesale trends. The Manheim Used Vehicle Value Index for mid-June rose 0.6% from May on a seasonally adjusted basis, though non-adjusted wholesale prices slipped 0.8%. Cox Automotive tied the softness to normal seasonal declines.
Separately, Hertz said it plans to offer $100 million of its stock in a public offering. The company will loan the shares to J.P. Morgan Securities, one of the underwriters, which will keep all proceeds and pay a nominal lending fee.
Hertz also announced a private offering of $300 million in exchangeable senior first-lien secured PIK notes due 2030. The company said its Hertz Corp. subsidiary may grant initial purchasers an option to buy up to $45 million more. Hertz said it intends to use the proceeds for general corporate purposes, which may include repaying debt.
