Hertz Global Holdings Inc.’s stock tumbled 7% early Tuesday to put it on track for its lowest close since emerging from bankruptcy in July of 2021, after the car rental company posted a wider-than-expected fourth-quarter loss.
As expected, Estero, Fla.-based Hertz
HTZ,
booked $245 million of charges relating to plans to reduce its electric vehicle fleet, a move it had pre-announced in January.
Hertz swung to a loss of $348 million, or $1.14 a share, for the quarter, after 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 to $1.36, wider than the $1.05 loss per-share FactSet consensus.
Revenue rose to $2.184 billion from $2.035 billion, just ahead of the $2.154 billion FactSet consensus.
Chief Executive Stephen Scherr said the business was buoyed by solid demand and a stable rate environment in the quarter.
“Nevertheless, we continued to face headwinds related to our electric vehicle fleet and other costs throughout the quarter,” he said in a statement.
The company said in January it planned to sell about 20,000 electric vehicles from its fleet, or about one-third of the total, in another sign that the EV revolution is stalling amid weak demand from consumers.
The move is aimed at better balancing supply and expected demand for EVs, allowing the car-rental company to scrap a disproportionate number of lower-margin rentals and reduce damage expenses associated with EVs.
EVs require special tools and parts and specialist knowledge to repair after a crash, more so than traditional gas-powered vehicles.
Hertz said in October of 2021 it would buy 100,000 Teslas
TSLA,
to expand its EV Fleet.
The company said average vehicles rose 11% in the quarter to 553,545, while average rentable vehicles were up 13% at 527,267.
Vehicle utilization transaction days rose 12%. Total revenue per user a month was down 7% in the quarter.
The stock has fallen 54% in the last 12 months, while the S&P 500
SPX,
has gained 20%.
This story originally appeared on Marketwatch
