On February 6, 2024, Hertz Global Holdings Inc (HTZ, Financial) released its 8-K filing, detailing the financial results for the fourth quarter and full year of 2023. The company, known for its vehicle rental services under the Hertz, Dollar, Thrifty, and Firefly brands, experienced a mixed financial quarter with revenue growth overshadowed by a net loss, primarily due to challenges with its electric vehicle (EV) fleet and other costs.
Hertz's fourth quarter saw a 7% increase in revenue to $2.2 billion compared to the same period in 2022, driven by increased volume across various customer channels. Despite this, the company reported a GAAP net loss of $348 million, translating to a $1.14 loss per diluted share, and an adjusted net loss of $418 million, or $1.36 loss per diluted share. The adjusted Corporate EBITDA was negative at $382 million, including a $245 million net depreciation expense related to the sale of EVs.
For the full year 2023, Hertz achieved a GAAP net income of $616 million, a 7% margin, and an adjusted net income of $172 million. The adjusted Corporate EBITDA for the year was $561 million, a 6% margin. The company ended the year with a strong liquidity position, with $2.0 billion in corporate liquidity, including $764 million in unrestricted cash. Additionally, Hertz repurchased 19.4 million shares of common stock for $291 million.
Financial Performance Analysis
Stephen Scherr, Hertz chair and chief executive officer, commented on the quarter's performance, stating,
Our business benefitted from solid demand and a stable rate environment in the fourth quarter,"but also acknowledged the headwinds faced due to the EV fleet and other costs. Scherr remains confident in the company's ability to address these challenges and improve financial performance moving forward.
The company's focus on rate over utilization, as well as increased fleet interest expenses due to the rising interest rate environment, contributed to the quarter's financial outcomes. Direct operating expenses also increased year over year, largely due to elevated net collision and damage expenses.
Hertz's performance in the fourth quarter reflects the ongoing challenges in managing an EV fleet within the automotive rental industry. The significant net loss and negative adjusted Corporate EBITDA margin highlight the impact of these challenges on the company's profitability. However, the revenue growth and proactive measures to address the EV-related issues suggest potential for recovery and operational improvement in the future.
Value investors may find Hertz's efforts to streamline operations and enhance profitability, coupled with its share repurchase program, indicative of management's confidence in the company's long-term prospects. The company's liquidity position and cash flow management will be key factors to monitor as Hertz navigates the evolving automotive rental landscape.
For a detailed breakdown of Hertz Global Holdings Inc (HTZ, Financial)'s financials and further insights into the company's performance, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Hertz Global Holdings Inc for further details.
