Hertz Guides To A Fourth-Quarter EBITDA Loss And Trims Year-End Liquidity To About $800 Million
Hertz expects negative $50 million to $100 million in fourth-quarter adjusted EBITDA, and year-end liquidity of about $800 million, down from $1 billion.
Hertz, the car-rental company behind the Hertz, Dollar and Thrifty brands, expects an adjusted corporate EBITDA loss of $50 million to $100 million in the fourth quarter, Chief Financial Officer Scott Haralson said on the company's earnings call Thursday. The outlook is lower than prior expectations, and he also cut the year-end liquidity forecast to about $800 million from roughly $1 billion.
A best-in-three-years quarter that still missed
Third-quarter adjusted corporate EBITDA (earnings before interest, taxes, depreciation and amortization, adjusted) was $233 million, up $30 million from a year earlier and the best result in three years. Haralson said it was still more than $40 million below the low end of the company's guidance. Revenue rose 5.6% to $2.6 billion, and GAAP net income was $116 million, or 20 cents a share; adjusted net income was $67 million, or 14 cents a share.
Haralson blamed collision and maintenance costs, which ran about $15 million to $20 million above expectations on higher collision frequency and costlier repairs, particularly for parts and repairs on newer vehicles. International results came in about $30 million below plan, with international revenue per day down about 60 basis points, or 0.6 percentage points. He said Hertz is planning for repair costs to stay elevated.
He attributed the lower fourth-quarter outlook to international softness, lower TSA passenger volumes and those repair costs. The midpoint, he said, is still more than $100 million better than a year earlier.
CEO Gil West said cost control is "where most of the work remains." In the US, revenue per day rose more than 8%.
Liquidity falls, and debt talks wait
Hertz ended the third quarter with $946 million of liquidity. Haralson now expects about $800 million at year-end, excluding any strategic transactions, and that figure still includes repaying $200 million of bonds that mature in early December. Management is leaning on sale-leasebacks of owned properties and a somewhat smaller fleet to manage cash.
Asked by a Deutsche Bank analyst about upcoming maturities, Haralson said there were no updates yet. "I hope you give us a little leeway there," he said, adding that the company hopes to say more on or before its next earnings call.
Hertz in the 2027 outlook: adjusted corporate EBITDA of $500 million to $800 million, a wide band whose middle is similar to the company's earlier view of at least cash-flow break-even. That range assumes nothing from further franchise conversions, which Haralson said could bring in more than $500 million of proceeds during the year, with liquidity benefits likely starting in late first quarter or early second quarter.
A smaller fleet, more franchising, and Oro
Haralson said Hertz is becoming more aggressive about shedding unprofitable volume and underperforming locations, which could mean a smaller fleet and fewer rental days in the fourth quarter and into 2027. "We're trying to maximize profitable rental days," he said. Hertz is also cutting capacity in Europe.
West said franchising could become a much larger part of Hertz. Last week the company signed a deal to move its company-owned locations in the Czech Republic and Slovakia to its Baltic franchise partner.
Hertz's Oro mobility unit just secured an $80 million investment, West said, and is on track for about $600 million in revenue this year. Hertz keeps a majority economic interest, and from the fourth quarter its income statement will add a minority interest line. Haralson said the company is also still evaluating Oro's fleet strategy and the timing and impact of any changes.
Shares traded at $1.76, down about 22% from the prior close, in Thursday trading, for a market value of about $806 million.
West told analysts the company still sees a path to $1 billion or more of EBITDA, framing it as a question of "when" rather than "if."
Sources
- Hertz Global Holdings Q3 2026 Earnings Call Transcript — benzinga.com
- Hertz Stock Hits a Speed Bump: Revenue Reaches Three-Year High, but EPS Misses Estimates — benzinga.com
- Hertz Global Holdings, Inc. (HTZ) Lags Q3 Earnings Estimates — Yahoo Finance
- Las acciones de Hertz caen mientras los costos de colisión y mantenimiento afectan los resultados del tercer trimestre. — es.qz.com
- L'action de Hertz chute alors que les coûts de collision et d'entretien affectent les bénéfices du troisième trimestre. — fr.qz.com
