Shares of Hertz Global Holdings (HTZ -11.76%) were down 11.7% as of 2:30 p.m. EDT Thursday after posting in-line revenue but weaker-than-expected earnings for its third quarter of 2023.
Hertz’s record quarter wasn’t enough for Wall Street
Hertz’s quarterly revenue climbed 8% year over year to a company-record $2.703 billion, translating to generally accepted accounting principles (GAAP) net income of $629 million, or $0.92 per share. On an adjusted (non-GAAP) basis — which notably excluded a $328 million benefit related to the change in fair value of public warrants — Hertz’s net income was $230 million, or $0.70 per share. Analysts, on average, were expecting higher adjusted earnings of $0.76 per share on roughly the same revenue.
Hertz Chairman and CEO Stephen Scherr said the company enjoyed strong demand and stable pricing, as well as growth from its rideshare business. “We nonetheless remain focused on the cost side to improve margins,” Scherr added. “Our ongoing investments will give rise to better operating fundamentals, and with the growth opportunities ahead of us, I am confident in the trajectory of our business and the forward for Hertz.”
What’s next for Hertz stock?
This wasn’t exactly a terrible quarter; to the contrary, notwithstanding its modest earnings shortfall relative to analysts’ expectations, Hertz’s results were underscored by encouraging demand. It seems the company continues to take steps in the right direction.
Even so, Hertz declined to provide specific forward financial guidance as it focuses on cost management and streamlining its operations. With so many other impressive stocks already operating from positions of strength and outsize growth, I’m personally content continuing to watch this one from the sidelines.
Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.