Hertz shares tumble after worse-than-expected quarterly loss

May 13, 2025 Updated Tue., May 13, 2025 at 2:20 p.m.

By David Welch washington post

ATTN: Financial editors

13 May 2025

(Bloomberg) — Hertz Global Holdings Inc. shares plunged after the car-rental company posted a larger-than-expected loss in the first quarter, pressured by a slowdown in customer bookings.

Revenue fell 13% in the period, contributing to an adjusted loss of $1.12 per share, the company said in a statement late Monday. Analysts had expected a 99-cent deficit on average, according to estimates compiled by Bloomberg.

The company showed declines on multiple key metrics. While forward bookings from leisure customers were up from a year ago, demand from corporate and government customers has moderated.

While Hertz is “accelerating its transition strategy and has some benefits on depreciation, we believe the risk ahead is on demand,” Barclays analyst Dan Levy wrote in a research report. He noted that the first-quarter miss was primarily in the Americas.

Hertz shares fell 16% at 9:36 a.m. Tuesday in New York. The stock had gained 90% this year through Monday’s close.

Hertz is offering fewer cars for rent as it freshens its fleet and contends with President Donald Trump’s trade war that has rattled markets and consumer sentiment. Bill Ackman’s Pershing Square Capital Management has amassed a nearly 20% stake in the rental giant, in a part as a bet that tariffs will drive up the value of Hertz’s fleet. Ackman has said that he thinks the worst is behind Hertz though he expects near-term results will be weak.

Hertz said Monday that it remains on track to reach positive adjusted earnings before interest, taxes, depreciation and amortization in the third quarter of this year. Its first-quarter adjusted Ebitda loss was $325 million, worse than analysts expected.

One culprit for missing estimates is a shortfall in revenue, which was $1.8 billion when analysts expected $2 billion. The company’s vehicle utilization rate climbed to 79%, up 3 percentage points from a year ago, but still historically weak. Pricing also fell, with revenue per day falling 5% to $53.38.

Hertz said it’s on track to reduce depreciation on its cars to less than $300 per month in the second quarter, earlier than expected.

This was the first quarter in which Hertz is no longer unloading electric vehicles, which renters shunned and resulted in high repair costs. The strategy misstep led to $2.9 billion in losses last year. Hertz earlier this year said it achieved its goal of selling off 30,000 battery-powered cars.

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