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(Reuters) -Hertz Global Holdings Inc on Wednesday said it posted a new record adjusted profit in the fourth quarter as demand for rental cars remained strong, but post-bankruptcy restructuring costs yielded a large net loss.
Shares tumbled 8% in after-hours trading after closing the regular session down 4.3%. They later pared those losses and were down 2%.
The Florida-based rental car company said adjusted earnings before interest, taxes, depreciation and amortization in the three months ended Dec. 31 came in at $628 million, ahead of an analyst estimate for $595 million, according to Refintiv data.
But on a net basis, Hertz recorded a $260 million loss, driven by charges related to its post-bankruptcy restructuring. Analysts polled by Refinitiv had not anticipated a net loss.
The company made a stock market return last year after exiting U.S. bankruptcy proceedings and is raising debt to refinance expensive preferred stock it issued as part of the restructuring.
Hertz reported fourth-quarter revenue of $1.9 billion, in line with Wall Street expectations, but roughly 12% below third-quarter revenue.
Average monthly revenue per vehicle – a core industry metric that represents pricing and vehicle utilization – was up some 30% compared to the same quarter in 2019, pre-pandemic.
The higher revenue is the result of an industry-wide drastic increase in prices as customer demand outstrips vehicle supply with consumers returning to the rental counter for leisure and business travel as the pandemic subsides.
Rental companies say they are trying to restock their fleets but grapple to secure vehicles amid a global shortage of semiconductors hampering global auto production.
Hertz interim Chief Executive Officer Mark Fields said the company’s goal was to grow its vehicle fleet profitably.
“We’ll only increase our fleet to the extent that travel increases,” Fields said in an interview with Reuters.
Fields will be replaced by former Goldman Sachs (NYSE:GS) finance chief Stephen Scherr on Feb. 28.
