Hertz (NASDAQ: HTZ) stock gained sharply Tuesday’s on stronger than expected quarterly profits and the projection of sustained travel demand.
The car rental company reported $0.50 in adjusted earnings per share for Q4, $0.03 above analyst expectations. Meanwhile, a 4.6% rise in revenue from the prior year to $2.04B met expectations.
"Our strong results in the fourth quarter and record performance last year reflect a commitment to customers - from leisure and corporate travelers to ride share drivers. With a focus on asset return and risk management, we showed better operating performance, more disciplined fleet management and a commitment to financial returns,” CEO Stephen Scherr said. “Our team delivered on renewed demand for travel, which is continuing.”
Operating cash flow was $277 million for the quarter. Fleet capex of $312 million was a source of cash in the fourth quarter, driven by fleet rejuvenation and seasonal defleeting. As a result, adjusted free cash flow was $424 million , reflecting a 137% conversion from Adjusted Corporate EBITDA. The Company acquired 19 million shares, or 6% of its common stock, during the quarter.
In December 2022 , the Company amended its European ABS facility to add the fleet in Italy , increase aggregate maximum borrowings to €1.1 billion and extend the maturity from October 2023 to November 2024 .
During the fourth quarter 2022, the Company repurchased 19 million shares for $315 million and has over $1.1 billion remaining under the Board's authorization.
Shares of the Florida-based auto rental company spiked 82 cents, or 4.6%, to $18.50.
