Car rental firm Avis Budget Group Inc. (NASDAQ: CAR) revised its first quarter and full-year forecasts sharply this morning, putting a bit of fuel in the tanks of competitors Hertz Global Holdings Inc. (NYSE: HTZ), Dollar Thrifty Automotive Group Inc. (NYSE: DTG), and even Zipcar Inc. (NASDAQ: ZIP).
Avis now forecasts first quarter revenue at $1.6 billion, in-line with the consensus estimate of $1.6 billion and net income of $14 million, which works out to adjusted EPS of around $0.13, versus expectations for an EPS loss of -$0.19. On a GAAP basis the company expects to post a loss of around $23 million, primarily due to a $27 million charge for debt extinguishment.
The better news is that Avis expects full-year EPS to total $2.35-$2.65, far above the current consensus estimate of $1.59. The company attributes the jump to the higher residual value of the company’s fleet on the used car market. The company said that “vehicle rental operations [are] performing moderately better” as well.
Hertz reports first quarter results tomorrow and is expected to post EPS of $0.01 on revenue of $1.96 billion. Dollar Thrifty reports results next week and is expected to post EPS of $1.28 on revenue of $356.14 million. National Car Rental, the world’s largest car rental agency, is privately held and claims annual revenue of around $14 billion.
Zipcar reported a better-than-expected EPS loss of -$0.08 last week for its first quarter. But the company lowered the low-end of its full-year guidance which implied that the company expects slower growth. Shares fell to an intraday low of around $10.00, but have since recovered some to $12.12. Zipcar’s market cap is less than $800 million, far below the other rental firms, and it needs to show share price growth in order to maintain investor enthusiasm.
Shares of Avis are up nearly 20% in the early afternoon today, at $15.78, in a 52-week range of $8.45-$19.24.
Paul Ausick
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.