In its first-quarter financial report, Hertz Global Holdings reported worldwide revenue from Hertz Equipment Rental Corp. (HERC) of $355 million decreased 1% in the 2015 first quarter, but was up 2% excluding currency effects, compared with the prior year. Worldwide rental and rental-related revenue was flat in the first quarter due to negative currency exchange rates, but grew 3% excluding currency effects.
In North America in the first quarter, total equipment rental revenue remained flat at $334 million year-over-year, but was 3% higher excluding currency effects. Revenue growth was tempered by accelerating weakness in oil and gas regions as well as a lower level of new equipment and parts sales. Of total North American equipment rental revenue, the U.S. represented 82% with Canada making up the balance. North America rental and rental-related revenue increased 1%, but was up 3% excluding currency effects. Volume in North America increased 4% in the 2015 first quarter. Equipment rental pricing was 2% higher compared with the 2014 first quarter. North American time utilization was 62% which was flat year over year. Dollar utilization at 35% was also flat year over year in the first quarter.
Upstream oil and gas revenue represented roughly 15% of North American equipment rental and rental-related revenue in the first quarter of 2015. Upstream revenue was down 13% in the first quarter, excluding currency effects, as major oil producers reduce spending. In contrast, all other North American rental and rental-related revenue increased 6% excluding currency effects.
Brian MacDonald, President and Chief Executive Officer of Hertz Equipment Rental Corporation, said, "The pressure from upstream oil and gas weakness came on faster than our internal forecast, impacting both revenue and profitability in the latest quarter. Our exposure in Northern Alberta, West Texas and Oklahoma is overshadowing the progress we have made in diversifying our top line into growth markets. As a result, we are reducing operating costs and capital spending to reflect our revised demand outlook."
Hertz Equipment Rental Corporation Separation
Hertz remains committed to the separation of its equipment rental business and is continuing to advance those plans, although the actual separation will not occur until after the Company has completed its accounting review, filed its financial statements with the SEC, and has completed the audited carve out financial statements for the equipment rental business and requisite SEC filing activities for the separation.