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Hertz accounting backlash: New costs, spinoff delay, execs to go dark on CC

  • Hertz (HTZ) says the widespread accounting problems at the company could delay the planned separation of its equipmental-rental business.
  • Costs tied to the accounting flap are likely to pull Q1 results below consensus estimates.
  • Q1 earnings tallies will be released by Hertz on June 9, but execs with the company will go dark for its planned conference call.
  • SEC Form 8-K
  • HTZ -11.1% premarket.
Comments (6)
  • Invest84
    , contributor
    Comments (84) | Send Message
     
    Does anyone have an educated opinion on what is going on - is this stuff material to the ongoing operations of the business or is this just one-time in nature?

     

    It sounds like the latter but when accounting issues spring up, it is possible there is a more serious issue with management.
    6 Jun, 09:23 AM Reply Like
  • june1234
    , contributor
    Comments (2599) | Send Message
     
    I like issues ,has a nice ring to it. Used to call it fraud or incompetence back in the day now its "issues" or "irregularities".
    6 Jun, 10:42 AM Reply Like
  • ceristeare
    , contributor
    Comments (144) | Send Message
     
    still long CAR
    6 Jun, 11:28 AM Reply Like
  • Invest84
    , contributor
    Comments (84) | Send Message
     
    I doubt this is fraud - incompetence, maybe.
    6 Jun, 12:43 PM Reply Like
  • Jean Smith
    , contributor
    Comments (136) | Send Message
     
    It's time to buy Htz. I did.If it goes lower.I will increase my holdings.Again,patience is the name of the game !Guaranteed,it will make a nice comeback. Do I know when?Not at all.Better then idle money.It is too big to fail.
    9 Jun, 04:01 PM Reply Like
  • Invest84
    , contributor
    Comments (84) | Send Message
     
    Jean - Too big to fail - doubtful. I don't necessarily think that this will sink the company. But HTZ has had a nice run over the past couple years, and even if it drops to $26 - it's still trading at 14x 2014E EPS of $1.81 (and who knows what the revised EPS is going to be). While this is cheaper than the market and CAR is trading at a significant premium - it's not ridiculous.

     

    Also, it's not like HTZ is knocking the cover off the ball - US rental revenue as up 4.5% vs. rental revenue per day which was down 1.6% due to excess fleet (which further proves management's inability to efficiently manage the business). This compares to CAR's North American organic revenue increase of 7%.

     

    So while the price has taken a hit - I think the market has given us false confidence that everything automatically just goes back up. I'm probably a buyer if it gets down to $22 due to tailwinds in the industry. Rising tides lifts all boats - maybe even those with holes in it.
    10 Jun, 10:14 AM Reply Like
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