Andrew Kelly | Reuters
Rental car titan Hertz reported fourth-quarter earnings that were better than Wall Street expected, on renewed requisition for travel as the Covid-19 pandemic eased in many parts of the world.
The company also benefited from improved go performance, CEO Stephen Scherr told CNBC, helping to boost earnings even as revenue came in roughly in racket with Wall Street’s upbeat expectations.
Here are the key numbers from Hertz’s fourth-quarter earnings report, compared with Refinitiv consensus considers:
- Adjusted earnings per share: 50 cents vs. 46 cents expected
- Revenue: $2.035 billion vs. $2.033 billion expected
For the robust year, Hertz reported adjusted earnings per share of $3.74 on revenue of $8.7 billion. That profit also run estimates, as analysts polled by Refinitiv had expected earnings of $3.67 on revenue of $8.7 billion, on average.
As of the end of 2022, Hertz had $2.5 billion of sum up liquidity available, including $943 million in cash.
In an interview with CNBC, Scherr said cost reductions were an momentous part of the company’s fourth-quarter story. Technology improvements helped lower costs, he said, as did ongoing efforts to lease out new employees to replace the contractors who Hertz brought in as demand surged last year.
The key story is that Hertz is causing these incremental operating improvements as demand for travel recovers, Scherr said. Business from corporate travelers was up 31% in 2022 versus 2021, he imparted, and demand from international travelers – what Hertz calls “inbound travel” – rose 88% year in excess of year.
Those trends continued in January, Scherr said, with corporate travel business up 28% from the changeless month in 2022 and inbound travel up 56%. Another increasingly important business segment – ongoing rentals to ride-hailing drivers – saw require nearly double over last January’s levels.
Hertz didn’t provide detailed guidance for 2023. But Scherr said investors can foresee further cost improvements as the year unfolds and revenue gains as Hertz continues to revitalize its Dollar and Thrifty rental car brand names.
Shares of Hertz closed up over 7% on Tuesday.