Hertz Global’s stock plunged nearly 17% Tuesday following the release of disappointing first-quarter earnings and a $250 million at-the-market stock offering, triggering renewed investor concerns about the company’s turnaround efforts. The sharp decline followed a morning call with investors where executives discussed reduced revenue, lower fleet capacity, and ongoing challenges stemming from weakened demand, higher vehicle prices, and President Donald Trump’s tariffs on automobiles.
During the call, Hertz reported an adjusted loss per share of $1.12, missing analyst expectations of a 97-cent loss. Automotive revenue also came in lower than expected at $1.81 billion, compared with the anticipated $2 billion. The company confirmed it will issue new shares to help manage its debt maturities and strengthen its financial position. According to Chief Financial Officer Scott Haralson, the final size and timing of the stock sale will be based on market conditions as the process unfolds.
The company’s decision to reduce the number of vehicles available for rent has been a focal point of concern, especially as lower bookings and decreased consumer sentiment weigh on business. Chief Executive Officer Gil West told investors that Hertz is focused on cost controls and optimizing its fleet under the company’s “Back-to-Basics Roadmap.” This strategy includes aligning supply with demand to drive profitability, even if it means trimming revenue in the short term.
Hertz’s total revenue fell 13% compared to the same quarter last year, attributed largely to an 8% reduction in fleet size. However, the company reported progress on its turnaround goals, citing a $92 million year-over-year reduction in direct operating expenses and reaffirming targets such as lowering depreciation per vehicle and achieving positive adjusted earnings by the third quarter of 2025.
The firm also saw record vehicle sales to retail buyers in the first quarter, supported by resilient used vehicle values amid trade pressures. Still, analysts flagged ongoing demand risks as a potential drag on recovery. Barclays analyst Dan Levy noted that while Hertz is making operational gains, the overall outlook remains cautious given uncertainty around consumer demand.
Before Tuesday’s drop, Hertz shares had surged 90% year-to-date, partly fueled by investor optimism following Pershing Square Capital Management’s 19.8% stake in the company. However, with the latest results and cautious guidance, Hertz faces renewed scrutiny as it works to stabilize operations and regain market confidence.
