Hertz Global Holdings, Inc.
) posted better-than-expected third-quarter 2013 results, with
adjusted earnings per share of 73 cents surpassing the Zacks
Consensus Estimate by a couple of cents. The quarterly earnings
rose 15.9% from 63 cents per share earned in the prior-year
quarter on the back of robust sales in its four principal
businesses including U.S. off-airport car rental, Donlen,
worldwide equipment rental and Dollar Thrifty.
Reported earnings came in at 47 cents a share, 14.5% lower
than 55 cents a share earned in the prior-year quarter.
Net revenue at Hertz increased approximately 22% to $3,069.4
million year over year and beat the Zacks Consensus Estimate of
$3,022 million. Increased revenue was primarily accountable to
the acquisition of Dollar Thrifty, one of its small
During the quarter, earnings before interest, taxes,
depreciation and amortization (EBITDA) of the company climbed 22%
from third-quarter 2012to $740.8 million.
Revenues for the U.S Car rental segment escalated 32.6% year
over year to $1,765.5 million owing to the acquisition of Dollar
Thrifty, facilitating a rise of 28.4% in record transaction days.
However, this was partially offset by the divestiture of
Advantage. During the quarter, U.S off-airport sales and car
rental total revenue per transaction day (RPD) surged 11.1% and
2.0% on a year-on-year basis, respectively.
Dollar Thrifty also led the average number of cars operated to
shoot up by 33.9% year over year to 493,400.
Compared to the previous-year quarter, quarterly revenues for
the International car rental segment came in at $768.6 million,
reflecting a 9.7% year over year growth, and benefited mainly
from the achievement of record transaction days that increased
5.5% owing to the sturdy performance in Europe. Rental car total
RPD for the segment rose 2.9%.
In the reported quarter, the average number of company
operated cars for the International segment totaled 187,900,
showcasing a 3.5% year-on-year growth.
Quarterly revenues from worldwide equipment rental segment
advanced 10.7% year over year to $401.8 million being favorably
impacted by a 14.9% increase in equipment rental volume coupled
with a 2.9% price hike.
During the quarter, revenues from all other operations segment
rose 9.7% from the previous year period to $133.5 million owing
to higher revenue contribution Donlen business.
Hertz ended the quarter with cash and cash equivalents of
$548.7 million, total debt of $17,136.2 million, and
shareholders' equity of $2,820.9 million.
Free cash flow during the quarter came in at $418.5 million
compared with negative free cash flow of $100.8 million in the
year-ago quarter backed by steady growth in earnings and
performance of working capital. However, this was partly offset
by accelerated investments and capital expenses.
Under the new share buyback program announced by management,
the company can repurchase shares worth up to $300 million.
This largest general use car rental brand maintained its
guidance issued on Sep 26, 2013. The company forecasted revenues
from the worldwide segment to range from $10,800-$10,900 million,
corporate EBITDA between $2,120 and $2,190 million and earnings
in the band of $1.68 and $1.78 per share. The current Zacks
Consensus Estimate for 2013 is $1.74 per share.
Hertz expects to meet its targets for fiscal 2013 owing to the
Dollar Thrifty acquisition. Alongside, it is striving to maintain
its European profit enhancement program in the last quarter.
Other Stocks to Consider
This leading airport car rental brand in the U.S. and at 120
major airports in Europe holds a Zacks Rank #5 (Strong Sell).
Other stocks in the related industry warranting a look include
ExamWorks Group, Inc.
SouFun Holdings Ltd.
), both carrying a Zacks Rank #1 (Strong Buy) along with
) holding a Zacks Rank #2 (Buy).
EXAMWORKS GROUP (EXAM): Free Stock Analysis
HERTZ GLBL HLDG (HTZ): Free Stock Analysis
COMSCORE INC (SCOR): Free Stock Analysis
SOUFUN HLDG-ADR (SFUN): Free Stock Analysis
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