Hertz Global discloses it expects to be well below the low end of its previously provided 2014 guidance due to operational challenges and withdraws guidance
Co disclosed the following:
"The Company now expects to be well below the low end of its 2014 guidance due to operational challenges in the rental car and equipment segments as well as the associated costs related to the accounting review previously disclosed. These ongoing challenges include:
"The Company now expects to be well below the low end of its 2014 guidance due to operational challenges in the rental car and equipment segments as well as the associated costs related to the accounting review previously disclosed. These ongoing challenges include:
- Record level, industry-wide OEM vehicle recall activity, which has constrained the Company's U.S. fleet available for rent;
- Significantly higher-than-expected adjusted direct operating expense in U.S. rental car;
- Issues and delays associated with the installation of its Enterprise Resource Planning (ERP) and counter systems, which have adversely impacted anticipated synergy capture flowing from the Dollar Thrifty acquisition; and
- Continued soft demand in the equipment rental business segment.
--> Gabelli...
Hertz Global: With shares down over $4 premarket, use this as opportunity to Buy
Gabelli & Co. notes, with HTZ shares trading down over $4 premarket, firm would use this opportunity to Buy. Once HTZ sorts out its accounting issues, firm believes both the car and equipment rental business remain undervalued verses their respective peers. Both businesses have long term defensible industry positions with the opportunity for above GDP topline growth and subsequent operating leverage. The HERC business in particular remains of significant value, given the benefits of scale in the equipment rental industry and the secular shift by construction companies to rent vs buy equipment.