Smith Collection / Gado / Getty Images Hertz reported first-quarter results on Monday, May 12.

Key Takeaways

Hertz shares fell sharply Tuesday, a day after the rental car company reported weaker-than-expected revenue and a larger loss than projected for the first quarter. The rental car company said it is focused on its turnaround effort, including renewing its fleet and improving its margins. The stock was boosted last month when billionaire investor Bill Ackman's Pershing Square disclosed a 4% stake in the company.

Hertz Global Holdings (HTZ) shares plummeted Tuesday, a day after the rental car company reported weaker-than-expected revenue and a larger loss than projected for the first quarter.

Hertz reported an adjusted loss of $1.12 per share on revenue that fell 13% year-over-year to $1.81 billion. Analysts surveyed by Visible Alpha expected an adjusted loss of $0.95 on revenue of $2.02 billion.

Revenue Decline 'Driven Primarily by Reduced Fleet Capacity'

The firm said its revenue decline was "driven primarily by reduced fleet capacity," which fell 8%.

"Just a year ago, we were managing through an aging fleet and pressure on residual values," CEO Gil West said. "Today, thanks to swift and disciplined action, we've rotated into a newer, more efficient fleet that's resilient, cost-effective, and aligned with a rising residual environment."

Hertz said more than 70% of its U.S. rental fleet is no more than a year old, and that it is "focused on fundamentally improving the durability and margins of the business" the rest of this year and into 2026.

Hertz shares sank 17% shortly after markets opened. They entered the day up 90% so far this year, aided by last month's disclosure by billionaire investor Bill Ackman's Pershing Square that it had taken a 4% stake in the company.

UPDATE—This article has been updated with the latest share price information.

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