Used-car values help explain Hertz’s earnings miss

One line item on Hertz Global Holdings Inc.’s second-quarter results may hold the key to understanding one of the main reasons for car-rental stocks’ deep, longstanding underperformance.

Hertz’s net depreciation per vehicle per month rose to $353 in the U.S. in the second quarter, or 27% higher than the $278 in net depreciation in the second quarter of 2016.

The company pinned that, in part, to declining residual values.

Companies such as Hertz HTZ, -6.30% and rival Avis Budget Group Inc. CAR, -9.88% which reported late Monday, also missing expectations, have to offload thousands of cars they retire from their rental fleets every year.

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