Time New York: Mon 21 Aug 10:04 am  |  Save 15% on H&R Block Online

  
caticonslite_bm_alt

Avis (CAR) Lags Q2 Earnings Estimates, Updates 2017 Guidance

Zacks

Avis Budget Group Inc. CAR reported mixed second-quarter 2017 results wherein adjusted earnings per share were 30 cents compared with 63 cents in the prior-year quarter. Adjusted earnings also missed the Zacks Consensus Estimate of 42 cents.

GAAP earnings for the quarter was 4 cents per share compared with 38 cents in the prior-year quarter due to a decline in revenues.

Revenues were $2,238 million compared with $2,243 million in the year-ago quarter. The top line declined primarily due to higher operating expenses. However, revenues beat the Zacks Consensus Estimate of $2,227 million.

Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $140 million compared with $204 million in the year-ago quarter, driven by higher per-unit fleet costs in both its segments.


Segmental Performance

Americas reported revenues of $1,565 million compared with $1,593 in the prior-year quarter, primarily due to 4% reduction in time and mileage revenue per day. Per-unit fleet costs increased 10% to $344 million.

The International segment’s revenues were up 4% year over year to $673 million, due to 6% benefit from FranceCars which was acquired in Dec 2016, including a 3% negative impact from currency movements.

Financials

Avis ended the first six months of the year with cash and cash equivalents of $776 million. During the period, the company generated $1,139 million as cash flow from operating activities. It reported free cash flow of $397 million during the same period. Avis repurchased 1.9 million shares worth $50 million during the quarter.

Avis Budget Group, Inc. Price, Consensus and EPS Surprise

Avis Budget Group, Inc. Price, Consensus and EPS Surprise | Avis Budget Group, Inc. Quote

Guidance

The company updated its guidance for full-year 2017. It expects revenues to be in the range of $8.8−$8.95 billion. In the Americas segment, per-unit fleet costs are expected to be between 7% and 8%. Adjusted EBITDA is expected to be in the range of $725−$775 million, down from the earlier expectation of $800−$880 million. Adjusted earnings per share are expected between $2.40 and $2.85, down from the earlier expectation of $2.85–$3.50. The company expects to repurchase $200–$250 million worth of stocks in 2017, which is lower than the earlier guidance of $300 million.

Avis currently carries a Zacks Rank #4 (Sell). Better-ranked stocks in the industry include Core-Mark Holding Company, Inc. CORE, Healthcare Services Group, Inc. HCSG and Mitie Group plc MITFY, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Core-Mark has a long-term earnings growth expectation of 11%.

Healthcare Services Group has a long-term earnings growth expectation of 11%.

Mitie Group has a long-term earnings growth expectation of 1%.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

Zacks Investment Research
<-- You can share this post with your network,
or give us your opinion and leave a comment.
Be sure to check our RSS feeds for updates.