Hertz manages to fix financial books, lift cost cutting program image

Hertz Global Holdings Inc.’s shares soared after the rental-car company announced it had ended restating its financial results for more than two years and its expense savings were higher than initially forecasted.

The company finally managed to identify the $207 million it had “lost” through additional pretax misstatements from 2011 through 2013, according to a statement, which caused the company’s pretax income to drop as much as 23 percent while net income fell even harder, by up to 26 percent. Additionally, it also said its cost savings strategy has yielded better than expected results, predicting it would be able to salvage $300 million by 2016, which would be $100 million above the initial threshold. The company stock jumped up to 20 percent after it had registered a slide of 32 percent throughout the year. Hertz also said it would go on with a billion dollars share-repurchase plan, announced back in March 2014, while the break-up of its equipment-leasing unit, revealed at the same time, would be finished during the second quarter of next year.

A filling with US regulators showed an internal investigations of the mishaps found the situation at the high levels of management was “inconsistent and sometimes inappropriate. In particular, our former chief executive officer’s management style and temperament created a pressurized operating environment,” said the company. Last September the former chief executive officer, Mark Frissora, now the head of Caesars Entertainment Corp., was leaving for personal reasons. He was replaced in November by former United Airlines manager John Tague.

Via Bloomberg