Hertz (HTZ) to Spin Off Equipment Rental Division, Reports Earnings
Shares of Hertz Global Holdings (HTZ) closed up +1.24 or +4.77 percent on Monday, after the company announced it would be spinning off its construction equipment rental business. The Hertz Equipment Rental division will reportedly be spun off for $2.5 billion through a tax-free distribution that will tentatively be completed by the beginning of 2015.
In addition to the spin off news, the company also reported 2013 fourth quarter early this morning. The company reported a lower than expected loss, but missed on revenue.
Park Ridge, New Jersey based Hertz Global Holdings is an international car rental company with over 10,400 rental locations in roughly 150 countries worldwide. The U.S. business has about 3,200 staffed rental sites with more than 70 percent of them at airports. The companyâ s fleet of almost half a million vehicles consists of automobiles made by Ford F, General Motors GM, Toyota TM and others. Hertz revenue comes primarily from renting cars through a variety of car rental companies, but also rents heavy equipment at over 335 locations in the United States, Canada, China, Spain, France and Saudi Arabia. The companyâ s equipment rental division was responsible for over $1.5 billion in revenue in 2013. The new company will be named Hertz Equipment Rental Corp and will continue renting equipment such as forklifts, power generators, earthmoving equipment, pumps, trucks, trailers, compressors and other tools. The company plans to use $1 billion of the spin off money to fund a stock buyback program. Hertz also reported a fourth quarter net loss attributable to stockholders of -$0.6 million, or break even per share, this compares to a loss of -$36.8 million, or -$0.09 per share in the same period one year ago. Income for the fourth quarter came in at $121.1 million, which gave the company adjusted earnings of $0.26 per share, versus $139.1 million, or $0.33 per share in 2012â s fourth quarter. Analysts expected fourth quarter adjusted earnings to be $0.33 per share. Mark P. Frissora the company's chairman and chief executive officer stated in the earnings press release that, â
Published on Mar 18, 2014
By Jay Hawk