Hertz expects restatement of financials to hurt income more than previously anticipated

ESTERO, Fla. – Hertz, which is in the midst of correcting past accounting problems, said Wednesday that its restatement of financial results is going to hurt income more than it previously expected.

The car rental company had announced in June that it needed to review financial reports from the last three years and restate 2011 results. In November Hertz said that it also needed to restate its 2012 and 2013 results. That same month the company named John Tague as its new CEO after Mark Frissora stepped down from the post in September for personal reasons.

Hertz said it now anticipates that accounting errors will impact pretax income by about $28 million for 2013, $74 million for 2012 and $51 million for 2011. That's a total of about $153 million, up from its previous estimate of approximately $138 million.

Hertz said its review and investigation of its financial records is ongoing, so figures are subject to change. The company said that it still expects that it won't be able to file updated financial statements before the middle of the year.

Hertz also doubled its cost-savings goal to $200 million. The company had announced in November that it was looking to lower costs by about $100 million by cutting general and administrative expenses, reducing information technology and capital investments and cutting external strategic adviser expenses.

For the fourth quarter ended Dec. 31, Hertz foresees revenue of $2.55 billion. The company said that this is a preliminary unaudited result and may change once its financial restatement is complete. Analysts polled by FactSet predict $2.65 billion in revenue, on average.

Hertz Global Holdings Inc. said it is still committed to separating its equipment rental business, but that it won't happen until after it completes the accounting review, files its financial statements with the Securities and Exchange Commission and completes all the necessary financial statements for the equipment rental business and filings related to the separation.

The company said it does not hedge against currency movements and as a result expects its revenue growth for 2015 to be hurt by about 3 percent compared with 2014, at the current exchange rate.

Shares of Hertz added 35 cents to $23.11 in afternoon trading.