Hertz Global Holdings Inc. (NYSE: HTZ) said Friday morning that the company will delay filing its quarterly report on Form 10-Q because the company needs to restate its financial results for 2011 and make corrections to its statements for 2012 and 2013 based on the errors discovered in the 2011 reports.
Hertz was scheduled to report first-quarter 2014 earnings on June 9 and said Friday morning that results are likely to be below consensus as a result of costs associated with the accounting review and other items. The company did say the U.S. rental car revenue rose approximately 4.5% in the quarter and that total revenue per day was down 1.6% compared with the first quarter a year ago.
Second-quarter results in the United States “will be impacted by mix as volume growth in the off-airport business continues to track at a double-digit rate, airport volumes enter the softer shoulder period ahead of the third-quarter peak, and the discount Firefly brand captures incremental business.”
The company’s audit committee said that the financial statements for 2011 “should no longer be relied upon and Hertz must restate them.” The errors are related to the capitalization and timing of depreciation for some non-fleet assets, allowances for doubtful accounts in Brazil and allowances for uncollectible amounts and restoration obligations.
Hertz further revealed that independent auditor PricewaterhouseCoopers found “at least one” material weakness in the company’s internal controls over financial reporting that led to disclosure controls and procedures that were “ineffective” at the end of 2013. The company expects to receive an adverse opinion from PwC as a result.
The stock price was down about 1.6% in premarket trading Friday morning, at $30.00 in a 52-week range of $19.73 to $30.52. The high was posted Thursday and is essentially equal to the consensus price target of nine analysts.