New Account Growth Propels HERC Rental Volume in Third Quarter
Total worldwide equipment rental revenues decreased 3 percent for Hertz Equipment Rental Corp. in the third quarter, $401 million compared to $413 million in the third quarter a year ago. Excluding the impact of foreign currency, revenue increased $2 million, or 1 percent.
However rental volume increased 3 percent, driven by new account growth, predominantly derived from small local contractors and specialty segments as HERC diversifies its business. The company said pricing for the third quarter was flat year over year.
Worldwide revenues were negatively affected by continuing weak performance in stores serving upstream oil-and-gas markets during the quarter. In North America, revenue in these upstream oil-and-gas markets decreased 26 percent year over year on a constant currency basis, while non–oil-and-gas revenue increased 14 percent. In response to the continued weakness in oil-and-gas markets, HERC reduced its equipment fleet in this segment by 16 percent in the third quarter year over year.
Worldwide equipment rental adjusted pre-tax income for the third quarter of 2015 was $54 million, a decrease from $79 million in the previous year’s third quarter. Adjusted corporate EBITDA for the quarter 2 was $164 million compared to $178 million in Q314.
Hertz Global CEO John Tague said the company remains on track for the separation of HERC as a stand-alone company.
