Factors Likely To Shape Hertz Global's (HTZ) Earnings In Q3

Hertz Global Holdings, Inc. (NYSE:HTZ) is scheduled to release third-quarter 2018 results on Nov 8. In the last reported quarter, the company delivered a positive earnings surprise of 34.5%.

However, Hertz missed earnings estimates in seven of the preceding eight quarters. Also, it witnessed an average four-quarter negative earnings surprise of 8.1%.

On the earnings front, the Zacks Consensus Estimate for the third quarter is pegged at $1.78, mirroring an improvement of 25.4% from the year-ago quarter. Notably, the consensus mark remained stable over the last 30 days. For revenues, the Zacks Consensus Estimate stands at $2.64 billion, reflecting an increase of 2.5% from the year-ago quarter.

Let’s see how things are shaping up prior to this earnings announcement.

Factors at Play

Hertz remains on track with the execution of its turnaround plan to drive growth through enhanced fleet, service, brands and technology. Moreover, the company’s business segments performed impressively with higher revenues and adjusted EBITDA in the second quarter of 2018. Further, its turnaround initiatives in the United States bode well and marked the third straight quarter of growth owing to gains from robust strategies and significant investments in fleet, marketing and retail activities.

In addition, Hertz’s has been witnessing volume growth, courtesy of better mix of vehicles and rollout of the Ultimate Choice products. The company has also been benefiting from its technology transformation by updating, integrating and capitalizing on end-to-end digital innovations and microservices. These apart, Hertz remains focused to sustainable growth across all its business categories. All these initiatives are expected to drive the company’s top and bottom lines.

However, Hertz witnessed soft leisure travel in the second quarter due to lower demand in the tournament period of 2018 Football World Cup and the shift of Easter in the first quarter of 2018 versus 2017. This also hurt vehicle utilization. Moreover, the company remains keen on making higher investment spending toward fleet, brands and technology, which is expected to result in higher expenses and hurt profitability.

What the Zacks Model Unveils

Our proven model conclusively shows that Hertz is likely to beat estimates this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Hertz’s Earnings ESP of +13.48% and a Zacks Rank #2 make us reasonably confident of an earnings beat.

Other Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

CSX Corporation (NASDAQ:CSX) has an Earnings ESP of +0.62% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Teekay Tankers Ltd. (NYSE:TNK) has an Earnings ESP of +5.40% and a Zacks Rank #3.

Frontline Ltd. (NYSE:FRO) has an Earnings ESP of +30.77% and a Zacks Rank #3.

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