© Reuters. The logo of the American car rental company Hertz is seen at the Nantes-Atlantique airport in Bouguenais near Nantes, western France, April 7, 2016. REUTERS/Stephane Mahe/File Photo
By Chibuike Oguh
NEW YORK (Reuters) -Shares of Hertz Global rallied from a record low in early trading on Tuesday after the car rental giant reported a bigger-than-expected fourth quarter loss.
Hertz’s revenue rose 7% to $2.2 billion while its net loss widened to $348 million and an adjusted loss-per-share of $1.36. Wall Street analysts had expected an adjusted loss of 76 cents, according to LSEG data.
After the results were released the shares initially dropped nearly 6% to $7.73, their lowest since the company emerged from bankruptcy in July 2021. But the stock rebounded and later had risen by 8% to $8.87.
The median price target of the eight analysts covering Hertz is $9 and their average recommendation is “hold,” according to LSEG data.
Last month, Hertz said it would sell about 20,000 EVs, including those made by Tesla (NASDAQ:), from its U.S. fleet, a move designed to cut rising costs tied to collision and repair.
Instead, it intends to opt for gas-powered cars and will convert about 25% of its fleet, the largest in the U.S., to electric by year end.
“We continued to face headwinds related to our electric vehicle fleet and other costs throughout the quarter,” Hertz CEO Stephen Scherr said in a statement on Tuesday.
Hertz had taken steps to address those challenges and expected the EV sale and cost reductions to allow it to regain “operational cadence,” he said.
The company reported nearly $500 of depreciation expenses per unit per month owing to the impact of a write down in the value of its EV fleet vehicles that are to be sold.