Hertz readies for strong summer demand after upbeat quarter
11:32 am Thursday, April 27th, 2023
By Nathan Gomes
(Reuters) -U.S. car rental company Hertz Global Holdings Inc said on Thursday it was preparing for strong summer travel demand and projected a 20% jump in second-quarter revenue from the first, driving its shares up as much as 4%.
U.S. carriers including Southwest Airlines Co, Delta Air Lines Inc and United Airlines have offered upbeat forecasts for summer season travel on sustained demand despite mounting fears of an economic downturn.
“The demand and pricing dynamics are there,” CEO Stephen Scherr said in a post-earnings call.
Hertz, whose sales are closely tied to the airline and hotel industry, is also benefiting from more people hiring vehicles for their daily commute as more companies mandate work from office.
Demand for Hertz’s rental services was boosted by its electric vehicle fleet as consumers looking to buy a car with an alternate powertrain opted to rent those vehicles before deciding to purchase, said Tigress Financial Partners analyst Ivan Feinseth.
Hertz had about 50,000 electric vehicles, or 10% of its fleet, at the end of the first quarter.
The company, which offers Tesla Inc vehicles for hire, said it aimed to increase the number of EVs to make them more accessible for customers and added it was working to install more charging infrastructure around the U.S.
Hertz posted an adjusted quarterly net income of 39 cents per share for the first quarter ended March 31, compared with Refinitiv IBES estimates of 21 cents.
Overall revenue rose 13% to $2.05 billion, also topping expectations of $2.03 billion.
The company’s shares pared some gains to be up 2.1% at $15.51 in early afternoon trading.
(Reporting by Nathan Gomes in Bengaluru; Editing by Shinjini Ganguli and Sriraj Kalluvila)
