HTZ Hertz Global Holdings Inc

Hertz Global Holdings Inc. on Monday reported sharply lower quarterly profit and cut its financial projections for the year on continued weakness in its car-rental business.

It was the first reporting period since the company separated its car-rental and equipment-rental businesses in June.

Shares, down 37% this year, plunged 27% to $26.18 in after-hours trading.

Florida-based Hertz, whose car-rental brands include Dollar and Thrifty, has struggled to turn around operations after accounting errors forced it to adjust years of financial results. In addition to the equipment-rental separation, which gave it a much needed cash infusion to pay down debt, Hertz has been aggressively cutting expenses, targeting $350 million in cost-cuts for the year.

On Monday, Hertz said it remained on track to meet its cost-cut target but that during the third-quarter, it had to adjust substantially the value of some of its rental vehicles, which was compounded by lower rental volume and higher costs.

Hertz said it now expects to make 51 cents to 88 cents a share in adjusted annual profit, down from its August view of $2.75 to $3.50 a share, and expects free cash flow of $250 million to $300 million, compared with its previous view of $500 million to $600 million.

Hertz ended the quarter with $1.43 billion in cash and $14.86 billion in debt.

Over all, third-quarter profit fell to $42 million, or 49 cents a share, from $237 million, or $2.60 a share, a year earlier. Excluding certain other items, profit fell to $1.58 a share from $2 a share a year earlier.

The results were based on 6.6% fewer shares outstanding.

Revenue fell 1% to $2.54 billion.

Analysts surveyed by Thomson Reuters expected adjusted profit of $2.75 a share on $2.6 billion in revenue.

U.S. rental revenue fell 2%, driven by a 1% decline in volume and 3% in daily rates.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

November 07, 2016 19:05 ET (00:05 GMT)

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