Hertz Global Holdings Inc.'s stock $(HTZ)$ tumbled 10% early Tuesday, after the car rental company posted a wider-than-expected fourth-quarter loss as it booked charges to cover the costs of a major reduction of its EV fleet.
Hertz posted a net loss of $348 million, or $1.14 a share, for the quarter, after income of $116 million, or a loss of 1 cent a share, in the year-earlier period.
The company's adjusted per-share loss came to $1.36, wider than the $1.05 loss per-share FactSet consensus. Revenue rose to $2.184 billion from $2.035 billion, ahead of the $2.154 billion FactSet consensus.
Chief Executive Stephen Scherr said the business was buoyed by solid demand and a stable rate environment in the quarter. "Nevertheless, we continued to face headwinds related to our electric vehicle fleet and other costs throughout the quarter," he said in a statement.
The company has taken steps to address those challenges, including in January, announcing that it would sell about 20,000 electric vehicles from its fleet, or about one-third of the total, in what was the latest sign that the EV revolution is stalling amid weak demand from consumers.
The move is aimed at better balancing supply and expected demand for EVs, allowing the car-rental company to scrap a disproportionate number of lower-margin rentals and reduce damage expenses associated with EVs. EVs require special tools and parts and specialist knowledge to repair after a crash, more so than traditional gas-powered vehicles.
The company took charges of $245 million in the quarter to cover the depreciation costs related to its EV move. The stock has fallen 54% in the last 12 months, while the S&P 500 has gained 20%.
