Hertz Global Holdings Inc. reported third quarter 2013 worldwide revenues of $3.1 billion, an increase of 22.0% year-over-year. Revenues from worldwide equipment rental for the third quarter were $401.8 million, up 10.7% year-over-year.
Primary drivers of the increase in worldwide equipment rental revenues were stronger equipment rental volumes, up 14.9%, and a 2.9% increase in pricing. Volume increased on strong industrial and improving construction performance.
Adjusted pre-tax income for worldwide equipment rental for the third quarter of 2013 was $87.5 million, an improvement of $11.3 million from $76.2 million in the prior year period, primarily attributable to the effects of increased volume, improved pricing and cost management initiatives including improved time and dollar utilization. Worldwide equipment rental achieved an adjusted pre-tax margin of 21.8% and a Corporate EBITDA margin(1) of 45.5% for the quarter.
For Hertz Global Holdings Inc., third quarter 2013 adjusted pre-tax income was $519.5 million, versus adjusted pre-tax income of $424.8 million in the same period in 2012, and pre-tax income, on a GAAP basis, was $328.3 million versus $368.9 million in the third quarter of 2012. Corporate EBITDA for the third quarter of 2013 was $740.8 million, an increase of 22.0% from the same period in 2012.
Third quarter 2013 adjusted net income(1) was $337.7 million, versus $280.3 million in the same period of 2012, resulting in adjusted diluted earnings per share for the quarter of $0.73, compared to $0.63 for the third quarter of 2012. Third quarter 2013 net income attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders, on a GAAP basis, was $214.7 million or $0.47 per share on a diluted basis, compared to $242.9 million or $0.55 per share on a diluted basis for the third quarter of 2012.
"Our ninth consecutive quarter of record adjusted pre-tax income, which increased 22.3% year-over-year in the third quarter, was driven by solid revenue growth in four key businesses: U.S. off-airport car rental, Dollar Thrifty, Donlen and worldwide equipment rental," said Mark P. Frissora, the company's chairman and CEO. "In U.S. car rental, we were especially pleased to report stronger pricing in spite of carrying excess fleet due to lower-than-anticipated volume," he added.
"The equipment rental tuck-in acquisitions are allowing us to incrementally capitalize on the industrial recovery. HERC North American rental revenue grew 12.3 percent in the third quarter year-over-year, excluding currency," Frissora said in a conference call with investors.
"Its string of year-over-year double-digit growth continued, with total revenues up 12.3 percent in North America, excluding foreign exchange, versus the market's projected 7 percent growth rate this year, according to the American Rental Association. North America represented 93 percent of total equipment rental revenue. The top line increase is being driven by continued strength in oil and gas, industrial and specialty markets and the early beginnings of the construction recovery. Our North American construction rental revenue was up 16 percent in the third quarter," Frissora said in the conference call.
"The Architectural Billings Index continues to trend well, a positive sign for our business, and the construction loan pipeline continues to show positive momentum. In fact, construction loan commitments for the quarter ended June 30, which is the latest data available, were up about 29 percent year-over-year. Hertz is well positioned to take advantage of the construction upturn with the fleet investments we made last year and in 2013 first half," he said.
"In the third quarter, total pricing in North America increased 3.1 percent, with non-contracted pricing up 4.2 percent. National accounts represent 51 percent of the third quarter rental revenue. The 15 percent higher volume in North America benefited from greater overall rental penetration as more companies turned to renting versus buying equipment. Having the newest fleet in the industry and entry into new markets and geographies through small, strategic acquisitions is also driving the revenue growth and better fleet utilization," Frissora said.