Hertz Q2 2020 Earnings Report
Key Takeaways
Hertz Global Holdings reported a challenging second quarter due to the pandemic's impact on global travel. The company focused on aligning labor with rental demand, canceling fleet orders, cutting non-essential spending, and consolidating locations. Despite a 67% decline in global revenue, there was sequential monthly improvement as states and countries began to re-open.
Global revenue declined by 67% due to the pandemic's impact on travel.
The company reduced global direct operating and SG&A expenses by 47% year-over-year.
Hertz capitalized on trends in new driver and delivery service offerings, cargo trucks, and van rentals.
The U.S. used-car market experienced a strong rebound in May and June, with the company ramping up used-car sales efforts.
Hertz
Hertz
Hertz Revenue by Geographic Location
Forward Guidance
Hertz expects to generate about $2.5 billion in annualized savings. The company's priority is fleet management, and it aims to continue selling cars aggressively as it right-sizes its fleet.
Positive Outlook
- Disciplined adjustments to cost structure based on revenue fluctuations.
- Continued strong used-car market allows aggressive car sales.
- Laser-focused on capturing revenue, driving efficiency, and advancing critical technology.
- Capitalizing on rental opportunities off airport in the U.S.
- International fleet trending toward demand levels.
Challenges Ahead
- The company had to make difficult but necessary decisions to strengthen and position the company for growth.
- The toughest decisions have been those that impact the livelihood of our dedicated workforce.
- Voluntarily reorganizing under Chapter 11 in North America.
- Airport rental car volume declined 82%, roughly in line with airline travel weakness resulting from COVID-19 restrictions.
- Rise in COVID-19 infections in the south and west since then caused the positive leisure trend to slow again.
Revenue & Expenses
Visualization of income flow from segment revenue to net income