Hertz Global Holdings Inc. said first-quarter revenue of $1.8 billion was up 57 percent from a year ago, excluding the Donlen fleet management business sold last year. The company's adjusted earnings before interest, taxes, depreciation and amortization rose from about breakeven to $614 million, while its average global revenue per day soared 28 percent to $59.
Hertz, which emerged from bankruptcy in October, expects continued improvement in rental traffic so long as Covid-19 cases come down. Traffic volumes improved in the second half of the quarter as cases of the coronavirus omicron variant subsided, and March was the first month since the pandemic began in which revenue surpassed 2019 levels.
"It was a very solid quarter for us," said CEO Stephen Scherr. "Leisure travel when measured against 2019 is pretty much back. Corporate demand is coming back but still well shy of 2019. There's more demand to be had to take us back to where we were before the pandemic."
Scherr said leisure travel is about 90 percent of where it was before Covid-19 upended the market. Business travel is about 64 percent of normalized levels and international inbound travelers who rent cars are still at just 30 percent.
Hertz shares were down 6 percent in early trading Thursday..
The company also started getting its fleet utilization rates back near pre-pandemic levels. They were 75 percent in the quarter, compared to between about 82 percent two years ago, but reached 80 percent in March.
Hertz is making up for a shortfall in volume with strong pricing and because the rental cars that it sells in the used-car market are fetching high prices.
A year ago, Hertz's fleet depreciated $219 per car per month. In the first quarter of 2022, those vehicles actually gained $40 a car per month in value. That added $59 million to the bottom line, said CFO Kenny Cheung.
The company's business of renting Tesla electric vehicles is also helping margins, Scherr said. The cars cost more to rent per day, are cheaper to maintain and are rented out for longer periods.