HTZ Hertz Global Holdings Inc

Hertz Global Holdings Inc.'s stock dropped by more than half Tuesday after the company slashed its guidance and posted disappointing results Monday in the first quarter since it split its car- and equipment-rental operations.

With the roughly 51% drop to $17.44, Hertz's shares have now lost about 70% of their value so far this year as the company has continued to struggle with weakness in its car-rental business.

After the bell Monday, Hertz posted sharply lower quarterly profit, and it cut its financial projections for the year. On Tuesday morning, Deutsche Bank and Northcoast Research both issued downgrades to the company.

Florida-based Hertz, whose car-rental brands include Dollar and Thrifty, has struggled to turn around its 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 substantially adjust the value of some of its rental vehicles, which was compounded by lower rental volume and higher costs.

Hertz said it now expects to earn 51 cents to 88 cents a share in adjusted annual profit, far below its August view of $2.75 to $3.50 a share. Hertz ended the quarter with $1.43 billion in cash and $14.86 billion in debt.

Over all, Hertz's third-quarter profit fell to $42 million from $237 million a year earlier. Excluding certain items, adjusted profit was $1.58 a share, well below analysts' expectations of $2.75.

Revenue fell 1% to $2.54 billion, also under analysts' expectations of $2.6 billion.

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

Write to Anne Steele at Anne.Steele@wsj.com and Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

November 08, 2016 11:15 ET (16:15 GMT)

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