On Tuesday, shares of rental car company Hertz Global Holding HTZ are on the rise after the company reported a profit for its fourth quarter yesterday, as it reduced expenses and improved its fleet management. HTZ is up 11.35% in midday trading.
For Q4 fiscal 2015, Hertz reported adjusted earnings of $0.05 per share, in-line with the Zacks Consensus Estimate and increasing from the loss of $0.22 per share recorded in the year-ago quarter. Net revenues, however, fell short of the Zacks Consensus Estimate of $2.522 billion, coming in at $2.413 billion.
Hertz said Tuesday that it saved about $75 million in the quarter as part of its ongoing cost reduction plan. Its total expenses declined to $2.36 billion from $2.84 billion in the period.
Hertz, however, lowered its preliminary 2016 projections. The company now expects adjusted EBITDA guidance for the Hertz Global business to be in the range of $1.6-$1.7 billion compared with $1.7-$1.8 billion earlier. The EBITDA forecast for the Worldwide Equipment Rental segment is now in the range of $600-$650 million versus $625-$675 million projected earlier.
The lowered view resulted from the weakness in U.S. RAC Total Revenue growth in the latter half of fourth-quarter 2015, which has carried into the first quarter of 2016. The ongoing weakness in the upstream oil and gas business has also weighed on its Worldwide Equipment Rental segment.
Hertz also trimmed its Domestic RAC revenue growth guidance to 1.5%-2.5% from 2.5%-3.5% expected earlier.
Hertz currently holds a Zacks Rank #2 (Buy).
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