Hertz Profit Climbs, Despite Lower Top Line

Dow Jones Newswires

Hertz Global Holdings  said its third-quarter profit soared 59% as the company emerges from recent accounting woes, though revenue fell short of expectations on currency effects. In July, the rental-car company that operates its namesake brands as well as Dollar and Thrifty completed restating its financials, a process that cut its profit by about $58 million in 2012 and $51 million in 2013. Hertz, like its competitors, is facing new challenges as the rise of car-sharing operations, such as Uber, continues to pressure the rental industry. The company, whose shares have dropped 25% this year, has been trying to turn things around. Hertz named John Tague as chief executive in November and said in May that it planned to raise rental rates. "Our profit improvement in the third quarter is early evidence of the potential we see in our performance improvement plan," Mr. Tague said. He pointed to fleet efficiency, which was up three percentage points from the quarter last year to 83%. Mr. Tague also said the rental company had completed the integration of Dollar Thrifty operations, following the closing of the merger in November 2012. Hertz reported a profit of $237 million, or 52 cents a share, up from $149 million, or 32 cents, a year earlier. The company said adjusted earnings excluding certain items were 49 cents a share. Revenue dipped 4.6% to $2.98 billion. Analysts polled by Thomson Reuters had forecast adjusted earnings of 52 cents on $3.1 billion in revenue. Revenue fell 1.6% in the company's U.S. car-rental business, 13.6% in its international car-rental business and 2.9% in its world-wide equipment-rental business. Shares closed Friday at $18.81 and were inactive premarket. Write to Anne Steele at Anne.Steele@wsj.com

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