Hertz (HTZ) fourth quarter 2022 profit beats Wall Street estimates

Car rental giant Hertz announced fourth-quarter earnings that beat Wall Street expectations, driven by renewed travel demand as the Covid-19 pandemic eased in many parts of the world.

The company also benefited from improved operating performance, CEO Stephen Scherr told CNBC, which helped lift profits even as revenue was roughly in line with upbeat Wall Street expectations.

Here are the key numbers from Hertz’s fourth quarter earnings report, compared to consensus estimates from Refinitiv:

• Adjusted earnings per share: 50 cents vs. 46 cents expected
• Income: $2.035 billion vs $2.033 billion expected

For the full year, Hertz reported adjusted earnings per share of $3.74 on revenue of $8.7 billion. That profit also beat estimates, as analysts polled by Refinitiv had expected a profit of $3.67 on average revenue of $8.7 billion.

At the end of 2022, Hertz had $2.5 billion in total liquidity, including $943 million in cash.

In an interview with CNBC, Scherr said cost reductions were a big part of the company’s story in the fourth quarter. Technological improvements have helped reduce costs, he said, as have continued efforts to hire new employees to replace contractors Hertz brought in as demand surged last year.

The key story is that Hertz is making these incremental operational improvements as travel demand recovers, Scherr said. Business from business travelers was up 31% in 2022 compared to 2021, he said, and demand from international travelers — what Hertz calls “inbound travel” — was up 88% from one year to the next.

Those trends continued in January, Scherr said, with business travel activity up 28% from the same month in 2022 and inbound travel up 56%. Another increasingly important business segment – ​​ongoing rentals to ride-hailing drivers – has seen demand nearly double from last January’s levels.

Hertz did not provide detailed guidance for 2023. But Scherr said investors can expect further cost improvements as the year progresses and revenue gains as Hertz continues to revitalize its brands. Dollar and Thrifty rental cars.

Hertz shares rose more than 7% in early trading on Tuesday.