US recovery sees losses narrow at Hertz

US recovery sees losses narrow at Hertz

Car rental giant Hertz Global Holdings has seen losses narrow significantly over the fourth quarter of financial year, following a recovery in the key US car rental market and a cost cutting drive.

While the New Jersey based organisation reported a net loss of $30.9 million (£19 million) for the quarter, this compares to a $1.21 billion (£0.8 billion) loss for the same period a year ago.

Revenue for the quarter fell about three per cent to $1.74 billion (£1.13 billion), the company confirmed in a statement to markets.

“In 2010, we expect to take more costs out of our business processes, further develop new revenue sources, and open over 150 new rental locations in the US and internationally,” explained chief executive Mark Frissora in a statement.

Excluding restructuring charges, amortisation and other special items, Hertz said its 2009 fourth-quarter net income totalled six cents per share.


Supreme Court

It caps a positive week for the car rental firm, which secured a favourable ruling in the American Supreme Court on Wednesday.

In the case Hertz vs. Friend, the US company questioned how a court determines a national corporation’s principal place of business.

Hertz argued successfully a corporation’s headquarters should be considered its primary place of business; a view supported unanimously by the nine judges. The Opinion overturns a lower court ruling that held Hertz to a California class action lawsuit in state court as opposed to federal court.

“Hertz is gratified by the Supreme Court’s decision,” commented Hertz chairman Mark P. Frissora.

“We applaud the unanimous Opinion and the common sense approach in determining where major litigation affecting multi-state businesses should be handled.

“The Opinion impacts every corporation doing business on a nationwide basis, allowing legal disputes between citizens of different states to be decided in a federal court, rather than state court.”

Green Car

The car rental firm has also confirmed it will allow customers to rent electric vehicles from as early as next year.

Select rental sites in the US and Europe will offer the Nissan LEAF, a couple of months after the vehicle goes on sale in Japan, the US and Europe.

The LEAF is an electric vehicle powered by a rechargeable lithium-ion battery. Its range is around 160 km and it has a top speed of 90mph. The zero-emission hatchback can carry up to five passengers and be recharged at home or at a fast-charging station.