Hertz stock plummets to record low after disappointing earnings

  • Hertz’s stock drops 7% following the company’s disappointing Q4 financial results
  • The car rental company reports a loss of $348 million, wider than expected
  • Hertz books $245 million of charges related to reducing its electric vehicle fleet
  • The move to sell 20,000 EVs from its fleet signals weak demand for electric vehicles
  • Hertz aims to balance supply and demand, reduce damage expenses associated with EVs


Hertz Global Holdings Inc.’s stock has taken a significant hit, dropping 7% and heading towards its lowest close since emerging from bankruptcy in July 2021. The decline comes after the car rental company reported a wider-than-expected loss in the fourth quarter. Hertz’s decision to reduce its electric vehicle fleet has resulted in $245 million in charges, a move that was pre-announced in January.

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Disappointing Financial Results

Hertz swung to a loss of $348 million, or $1.14 a share, for the quarter, compared to income of $116 million, or a loss of 1 cent a share, in the year-earlier period. The company’s adjusted per-share loss came in at $1.36, wider than the $1.05 loss per-share FactSet consensus. While revenue rose to $2.184 billion from $2.035 billion, slightly exceeding the $2.154 billion FactSet consensus, Hertz faced challenges related to its electric vehicle fleet throughout the quarter.

Weak Demand for Electric Vehicles

Hertz’s decision to sell approximately 20,000 electric vehicles from its fleet, about one-third of the total, indicates a slowdown in the EV revolution due to weak consumer demand. This strategic move aims to better balance supply and expected demand for EVs, allowing Hertz to scrap lower-margin rentals and reduce damage expenses associated with EVs. Unlike traditional gas-powered vehicles, EVs require specialized tools, parts, and knowledge to repair after a crash.

In October 2021, Hertz announced its plan to purchase 100,000 Teslas to expand its EV fleet. However, the disappointing financial results and the need to reduce the EV fleet highlight the challenges faced by the company in this sector.

Impact on Hertz’s Business

Hertz reported an 11% increase in average vehicles and a 13% increase in average rentable vehicles in the fourth quarter. Vehicle utilization transaction days also rose by 12%. However, total revenue per user per month saw a 7% decline. Despite solid demand and a stable rate environment, the company faced headwinds related to the electric vehicle fleet and other costs.


Hertz’s stock has experienced a significant decline, reaching its lowest point since emerging from bankruptcy. The wider-than-expected loss in the fourth quarter, along with the charges related to reducing the electric vehicle fleet, have raised concerns about the company’s financial performance. The weak demand for electric vehicles and the need to balance supply and demand highlight the challenges faced by Hertz in the EV sector. As the company navigates these obstacles, it will be interesting to see how it adjusts its strategy to remain competitive in the evolving car rental industry.

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