21.08.2014

Hertz continues to struggle

Hertz has withdrawn its forecasts for 2014 and has still to file any results for this year, while it works on restating results from earlier years. The accounting issues are also likely to delay the separation of its car and equipment rental operations further into 2015.

Much of the current problems relate to the car rental business, but the equipment rental division is also struggling, when compared to other large equipment rental companies.

Hertz said that in the second quarter revenues in the equipment rental business increased around one percent, due to lower levels of new equipment and parts sales, partially offset by a three percent improvement in rental revenues.

The company said: “The company’s sales force coverage has not kept pace with industry demand this year. Hertz is ramping up hiring to reverse this decelerating trend. And while the company is immediately implementing tactics to realign the imbalance of its fleet supply and demand, it continues to invest in new equipment to capitalise on long-term growth opportunities. In 2014, the company expects to spend approximately $600 million on gross fleet purchases.”

In addition Scott Sider group president of the car rental business has resigned effective immediately as has lead non-executive director George Tamke.