Avis's stock slides after third-quarter earnings fall short of estimates

MW Avis's stock slides after third-quarter earnings fall short of estimates

By Ciara Linnane

Car-rental company's shares have fallen 53% this year so far

Avis Budget Group Inc.'s stock was falling around 2% in after-hours trade Thursday, after the car-rental company's third-quarter earnings fell short of estimates.

Parsippany, N.J.-based Avis $(CAR)$ posted net income of $238 million, or $6.65 a share, for the quarter - down sharply from $627 million, or $16.78 a share, in the year-earlier period.

Revenue fell to $3.480 billion from $3.564 billion a year ago, as pricing declined 2% and rental days matched the year-earlier period.

The FactSet consensus was for EPS of $8.26 and revenue of $3.534 billion.

"We maintained a strong focus on pricing throughout the quarter, prioritizing higher-margin business which allowed us to keep our revenue per day stable with the Americas nearly flat," Chief Executive Joe Ferraro said in prepared remarks.

Avis's vehicle-utilization rate improved by about 2 percentage points in the quarter, he added. The company is bracing for strong holiday demand and believes it's well positioned to benefit.

Revenue in the Americas fell 4% to $2.640 billion, while international corporate and other revenue was up 1% at $840 million.

Avis issued $700 million of unsecured senior bonds during the quarter and used the proceeds to pay down borrowings under a secured floating-rate term loan due in 2029. The remaining proceeds were invested in the vehicle fleet.

The company had more than $1.2 billion of liquidity at quarter-end between committed and uncommitted facilities.

"We have well-laddered corporate debt and have no meaningful maturities until 2027," Avis said.

The company will host a conference call with analysts early Friday.

The stock has fallen 53% in the year to date, while the S&P 500 SPX has gained 19.6%.

-Ciara Linnane

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October 31, 2024 16:43 ET (20:43 GMT)

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