On the Dash:
- Hertz reported a surprise Q3 profit of 12 cents per share, reversing last year’s loss.
- Cost reductions and expanded retail car sales drove the company’s turnaround.
- Despite lower daily revenue, Hertz improved fleet utilization to a record 84%.
Hertz Global Holdings reported a stronger-than-expected third-quarter profit, driven by significant cost reductions and improved fleet management, signaling progress in the rental company’s ongoing turnaround strategy.
The car rental firm earned 12 cents per share on an adjusted basis, reversing a 68-cent loss from the same period last year and surpassing analyst expectations of roughly 3 cents per share. Revenue fell 4% year-over-year to $2.5 billion. Following the announcement, Hertz shares surged 34% in early trading in New York, marking the company’s most significant intraday gain since April.
Sharp improvements in fleet depreciation costs largely fueled the company’s profitability. Depreciation per vehicle per month fell to $273, well below the $300 target and roughly half the level recorded a year earlier when Hertz faced challenges offloading underperforming electric vehicles. The company has since streamlined its operations, focusing on cars that better retain value and optimizing fleet size to align with rental demand.
Hertz has also expanded its retail sales efforts to reduce depreciation losses by securing higher prices through direct-to-consumer sales instead of wholesale auctions. This includes partnerships with Amazon and the launch of its own vehicle sales platform designed to compete with digital used-car retailers such as Carvana. Company leadership described these efforts as part of an initiative to unlock the value of Hertz’s underused car sales division.
Despite progress on cost control and operational efficiency, the rental business still faces challenges. Revenue per rental day declined 3.8% to $59.26 in the third quarter. However, Hertz improved fleet utilization to a record 84%, up from 82% a year earlier.
