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ESTERO — The stock of car rental giant Hertz fell 9.4% after it posted financial results that disappointed investors.
Hertz, whose employees are moving into a new headquarters in Estero, reported revenues fell 5% to $2.98 billion in the quarter ending Sept. 30 compared with the same quarter one year ago. However, net income rose 59% to $237 million in the same period.
“Our profit improvement in the third quarter is early evidence of the potential we see in our performance improvement plan,” says John Tague, CEO of Hertz, in a statement. “Our fleet efficiency, which measures our ability to match capacity with demand, rose to record levels.”
The company reiterated its plan to spin off its equipment-rental business, a move investors demanded. “Meanwhile, we remained on track to achieve our cost reduction goals and made progress on strategic initiatives, including preparations to separate Hertz Equipment Rental as a stand-alone company and returning value to shareholders through the initial steps of our share repurchase program,” Tague says in the statement.
Hertz began buying back its shares (symbol: HTZ) in the third quarter as part of a $1 billion share repurchase program. During the most recent quarter, the company repurchased 14.8 million shares at an average price of $17.69 per share for a total of $262 million. The company funded the share repurchase through cash flow from operations and the sale of a portion of its ownership in China Auto Rental that resulted in proceeds of about $100 million.
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