Hertz Shares Tank on Weak Q1 and Stock Offering

The stock price of Hertz Global dropped by 17% during Tuesday after the company released unsatisfactory Q1 results and initiated a $250 million stock sale. The company reported an adjusted loss of $1.12 per share which exceeded the predicted loss of 97 cents while automotive revenue reached $1.81 billion below the $2 billion forecast. The stock price experienced a more than 20% decline before the market opened. CFO Scott Haralson explained that the company will use the stock offering together with refinancing to meet upcoming debt obligations. Through its “Back-to-Basics Roadmap” Hertz reduced its fleet capacity by 8% which resulted in a 13% decrease in annual revenue while the company focuses on cost reduction and vehicle utilization to achieve profit growth. CEO Gil West stated that the company will use fleet management and cost reduction strategies to fight against declining bookings and Trump’s auto tariffs and weak consumer attitudes. The company achieved two key Q1 accomplishments through its $92 million operating expense reduction and its highest-ever retail vehicle sales during a period of high residual values. The company plans to achieve positive EBITDA during Q3 while lowering depreciation costs during Q2. Despite a 90% stock price increase in 2025 due to Bill Ackman’s 19.8% stake Barclays’ Dan Levy identified potential demand challenges. The results demonstrate industry-wide problems because vehicle costs rise from tariffs and economic instability reduces travel demand.