Hertz (HTZ) Q4 2022 Earnings Beat Wall Street Estimates

Car rental giant Hertz reported fourth-quarter earnings that were better than Wall Street expected, thanks to a rebound in travel demand as the Covid-19 pandemic eased in many parts of the world.

The company also benefited from improved operating performance, CEO Steven Scherr told CNBC, which helped boost earnings even as revenue was roughly in line with Wall Street’s optimistic expectations.

Here are the key numbers from Hertz fourth quarter income statementcompared to Refinitiv consensus estimates:

• Adjusted earnings per share: 50 cents vs. expected 46 cents
• Income: $2.035 billion vs $2.033 billion expected

For the full year, Hertz reported adjusted earnings per share of $3.74 on revenue of $8.7 billion. Those earnings also beat estimates, as analysts polled by Refinitiv expected earnings of $3.67 on average revenue of $8.7 billion.

As of the end of 2022, Hertz’s total available liquidity was $2.5 billion, including $943 million in cash.

In an interview with CNBC, Scherr said cost cutting was an important part of the company’s story in the fourth quarter. Technological improvements have helped keep costs down, he says, as has the continued effort to hire new hires to replace contractors, which Hertz brought on board as demand surged last year.

The key point, Scherr said, is that Hertz is making these incremental operational improvements as travel demand recovers. Business from corporate travelers is up 31% in 2022 compared to 2021, he said, and demand from international travelers, which Hertz calls “inbound trips,” is up 88% year-on-year.

Those trends continued in January, Scherr said, with corporate travel up 28% from the same month in 2022, and inbound tourism up 56%. In another increasingly important business segment, existing car rentals for ridesharing, demand has nearly doubled since January last year.

Hertz did not provide detailed forecasts for 2023. But Sherr said investors can expect further cost cuts throughout the year and higher revenues as Hertz continues to revitalize its Dollar and Thrifty rental car brands.

Hertz shares rose about 3% in premarket trading on Tuesday.