Hertz Surges Most in Four Years as Cost Cutting Helps Earningsby
Rental-car company's 5-cent adjusted EPS exceeds estimates
Expense-reduction goal for 2016 set at more than $350 million
Hertz Global Holdings Inc. rose the most in more than four years after the rental-car company’s cost cutting and fleet revival paid off with fourth-quarter earnings that beat analysts’ estimates.
Earnings excluding some items were 5 cents a share, the company said Monday after the close in New York. The average of nine projections compiled by Bloomberg was 4 cents. Revenue fell 5.7 percent to $2.4 billion. Hertz said that excluding the effect of currency exchange rates, sales would have been $2.5 billion, matching what analysts estimated.
“By fundamentally improving our fleet management and reducing costs throughout the business, we delivered on our expected outcome for the fourth quarter and the full year, despite a highly competitive pricing environment,” Chief Executive Officer John Tague said in the statement.
Hertz said it achieved more than $230 million in cost savings last year, exceeding its goal. The company targeted reductions of more than $350 million this year to help withstand softer rental-car pricing in the U.S. and continued weakness in oil and gas exploration and production, which Tague said affects equipment rentals.
The shares jumped 12 percent to $9.54 at the close in New York. That was the biggest daily gain since September 2011.