Hertz Global Holdings (NYSE: HTZ) Misses Financial Guidance, Shares Fall

662

Yesterday, Hertz Global Holdings (NYSE: HTZ) announced that it withdrew its financial guidance report for 2014. The rental car company stated that its earnings for the fiscal year would come out to be significantly lower than the low end of its guidance for 2014. The company attributes this disappointment to the challenges in operations and accounting review costs.

Hertz is clearly in dangerous waters right now. The company’s shares fell sharply yesterday after the announcement was made. Recently, the stock has been shown much love from prominent hedge fund managers, including James Dinan from York Capital Management, Jeffrey Tannenbaum from Fir Tree Partners, and Larry Robbins from Glenview Capital Management.

On Wednesday morning, the company’s shares plunged by over 11 percent from $31.57 to $27.81. At market close on Wednesday the shares price climbed up to $30.17.

Hertz states that its fleet of rental cars had been negatively impacted by multiple recalls on the vehicles that the company uses and rents out to customers. This recall activity severely limited the number of cars that the company could rent out to customers. Additionally, the company reported that its operating expenses in the United States were higher than the company had initially expected. Hertz also pointed to delays in the installation for counter systems, which had impeded the immediately benefits that the company was hoping to obtain financially from its $2.3 billion buyout of dollar Thrifty Automotive. The rental car company also reported that the demand for cars in the equipment rental industry has been on a steady path downhill.

However, Hertz’s problems did not just start with the withdrawal of its financial guidance report for the 2014 fiscal year. The company has been experiencing issues since June of this year, when the company disclosed that an audit committee reviewed its financial records and had found errors in the financial statements for the past three years, and that the company would need to correct those mistakes. Those mistakes amounted to $46.3 million in out of period accounting errors over the course of the last three years. The company had also put off filing its financial report for the second quarter while its prior financial records were being reviewed.

 

Get Free Updates and Stock Alerts!



*We only send one email per week
Share.

Get Winning Stock Alerts!

Our track record speaks for itself! Our last 7 alerts have delivered combined gains in excess of 300% and there are no signs of slowing down. Join UltimateStockAlerts.com now before you miss out on our next big runner!

We will never sell or share your information.