Shares of Hertz Global Holdings, Inc. (NYSE: HTZ), an automotive vehicle rental service specialist, are down 14% as of 11:30 a.m. EDT after the company announced disappointing first-quarter results.
Revenue increased 8% to $2.1 billion, which was better than analysts' estimates calling for $1.97 billion. Adjusted for one-time items, Hertz posted a loss of $131 million, or $1.58 per share, which was a small improvement compared to the prior year, but analysts had expected an adjusted loss of $1.26 per share. Hertz isn't alone with its first-quarter woes, as shares of competitor Avis also declined last week after the company announced results.
Kathryn V. Marinello, president and chief executive officer of Hertz, commented in the press release:
Investors might be losing a bit of patience with Hertz, especially as the company plans to spend roughly $120 million on new information technology, $100 million on fleet-management systems, and another $80 million on marketing in 2018, with the expectation of similar spending next year. While Hertz's business is improving -- as evidenced by its narrowing bottom-line losses compared to last year -- it's going to take some time for those investments to pay off. Expect more speed bumps along the way.
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