Shares of Hertz Global Holdings (NYSE:HTZ), one of the world's largest vehicle rental companies with brands Hertz, Dollar, and Thrifty, are soaring 15% as of 10:48 a.m. EST Friday after the company released better-than-expected third-quarter results.
Starting from the top, total revenues jumped 7% to $2.76 billion, driven by a 10% increase in U.S. rental car revenue. The total revenue figure was higher than analysts' estimates calling for $2.68 billion. Adjusted earnings per share checked in at $2.14, which was well ahead of the prior year's $1.42 earnings per share and also well above analysts' estimates of $1.77 per share.
"Our operational turnaround continues to move forward as reflected by our fourth consecutive quarter of year-over-year revenue and adjusted earnings growth," said Kathryn V. Marinello, president and chief executive officer of Hertz Global, in a press release. "We are balancing our priorities of targeting a higher-quality revenue mix, while making investments in our operations, brands and technologies to optimally position the Company for long-term, sustainable growth."
It was a strong third quarter, especially considering Hertz competitor Avis Budget Group (NASDAQ:CAR) posted a meager 1% gain in revenue and a 1% decline in adjusted EBITDA during the third quarter. There's reason for investors to be cautiously optimistic, as this is the second consecutive strong quarter for Hertz, suggesting that its turnaround plan is gaining traction. Hertz has invested in refreshing its fleet, with roughly 90% of vehicles to be newer and more desirable models. If Hertz is to maintain this momentum, it needs to carry out the launch of its fleet management and accounting systems, car rental system, and booking and reservation system toward the end of 2019 and into the beginning of 2020.