Why Hertz Is Back on Track

At the same time, Hertz also announced its progress on the planned separation of its equipment rental business, in conjunction with its capital allocation, cost savings capacity plans and fleet refresh. The cash from the separation will be used to pay down debt and support additional share repurchase programs.

Hertz also reaffirmed its $1 billion share repurchase program.

Finally, the company provided guidance on the 2015 fiscal year. Hertz expects consolidated corporate EBITDA of $1.45 billion to $1.55 billion, net non-fleet capex of $275 million to $296 million, and U.S. fleet capacity growth of 0.5% to 1.5%.

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Hertz President and CEO John Tague commented:

Going forward, we are committed to developing a differentiated customer experience and premium brand position for Hertz that is number one in the industry, while revitalizing Dollar and Thrifty into leading value brands. We aspire to be the best rental car company in the world, recognized for the quality and convenience of our products and services, as well as the value we will create for shareholders.

He continued:

2015 is a transition year for Hertz. We are making important investments in our fleet, systems and service, and adding new talent to complement the existing expertise throughout the Company. In addition, we are taking actions to rationalize the Company’s cost platform, dramatically improve customer satisfaction and reset our capacity. These actions and early results are indicative of the progress we are making across the organization. Our commitment to the Company’s share buyback program is reflective of our confidence in driving operating performance that is sustainable and enables us to return capital to shareholders.

Shares of Hertz closed Thursday down 0.4%, at $16.99 in a 52-week trading range of $16.65 to $31.61. In the after-hours trading session, shares were up 17.7% to $20.00. The stock has a consensus analyst price target of $25.00.

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