ESTERO — Hertz reported a quarterly net loss as the car rental business suffered from lower prices.
The car rental giant reported a net loss of $51 million on revenues of $2.3 billion in the quarter ending March 31. That compares with a net loss of $70 million on revenues of $2.45 billion in the same quarter one year ago.
“Though industry pricing decreased more than we anticipated, we mitigated the impact on our performance by continuing to lower our costs, which resulted in a 5% reduction in unit cost in our worldwide rental car business in the quarter,” says John Tague, president and CEO of Hertz, in a statement.
The company has been wringing out cost savings from its operations and says it has saved $70 million in the first quarter. Hertz executives expect cost savings to total $350 million this year.
“During the first quarter, we followed through on our plans to bring fleet levels in line with expected demand in the U.S. market and saw a significant improvement in our fleet efficiency as a result,” Tague says in the statement. “By continuing to lower our costs and improve overall quality in our business as part of our three-to-five year margin improvement plan, we remain on track to deliver on our adjusted corporate EBITDA target for 2016 despite the first-quarter pricing decline.”
Headquartered in Estero, Hertz operates the Hertz, Dollar, Thrifty and Firefly car rental brands in approximately 10,000 corporate and franchisee locations throughout the world.