Boston, MA 06/09/2014 (wallstreetpr) – A leading car rental company serving more than 150 countries across 10,400 locations, with one-third of the locations in United States and about half a million cars from Ford, Toyota, General Motors and many others. Hertz Global Holdings, Inc. (NYSE:HTZ) has come out with the news of recalculating its financials for the past three years. This has led to faltering of the estimate made about HTZ for FY14 based on the past result.
As per the auditors of Hertz Global Holdings, Inc. (NYSE:HTZ), some of the accounting errors and material weaknesses in the past financial data came up when the first quarter result were being estimated by them, which were based on the data since 2011. These problems were mainly attributed to allowance of an amount that couldn’t be collected on account for damaged vehicles and on facility lease as per certain obligations. In order to fix these errors, HTZ has delayed its FY14’s quarter one results, to first restate FY11 financials and review the results of FY12 and FY13 results.
Consequences On Present Expectations
The stock market very quickly reacted to this news, with Hertz Global Holdings, Inc. (NYSE:HTZ) share prices dropping steeply from a close price of $30.49 to $27.73 giving 9.05% fall in prices in just one day, indicating that the investors are not happy with the news like this. It has now become difficult to forecast about the future performance as there is no reliable base point to count upon.
Analysts Beg To Differ
However, analysts beg to differ on the matter of doubting the investments based on this news as they still recommend HTZ as a “buy.” Many equity analysts like the ones at Zacks have set an average target of $31 per share price.
Hertz Global Holdings, Inc. (NYSE:HTZ) reaffirmed its expectations about financial performance for FY14, believing that it can match the analysts expectations about the revenue, but with a lower $1.86 per share. The company expects to earn revenue between $11.4 to $11.7 billion and an EBITDA between $2.06 and $2.42 billion with a net income roughly around $864 billion. The company did perform well in the last quarter, with a 10.3% increase in revenues in comparison to the same quarter last year.