Hertz, the renowned car-rental company, has confirmed that it anticipates expenses relating to collision and damage to have an ongoing negative impact on its fourth-quarter results. In a regulatory filing made on Thursday, the company stated that it expects to report an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) in the range of -$120 million to -$130 million for the period. This figure, however, does not include the non-cash charge associated with the sale of electric vehicles.
Revenue projections for the fourth quarter indicate a range of $2.1 billion to $2.2 billion, compared to $2.04 billion during the same period the previous year. According to analysts surveyed by FactSet, the expected revenue for this period is $2.19 billion.
Notably, Hertz plans to sell 20,000 electric vehicles (EVs) in the United States. This accounts for approximately one-third of its global EV fleet and is due to weaker demand. The decision to reduce its electrified fleet was supported by Hertz’s acknowledgement of elevated collision and damage expenses associated primarily with EVs.
While operating expenses per transaction day are expected to remain constant during this quarter (excluding collision and damage expenses), Hertz continues to face ongoing challenges due to high collision and damage expenses linked to EVs.
The car-rental giant remains optimistic about its future financial performance despite these obstacles. However, it is worth noting that the impact of collision and damage expenses has contributed significantly to Hertz’s decision to reduce its EV fleet.