Avis Budget Group Shares Decline as Q3 Earnings Fall Short of Expectations

PARSIPPANY, N.J. - Avis Budget Group, Inc. (NASDAQ:CAR) reported third-quarter earnings that fell below analysts' expectations, causing the company's shares to drop 3.5% in after-hours trading.
The car rental company disclosed an adjusted earnings per share of $6.65, which is $1.77 below the analyst consensus of $8.42. Quarterly revenue came in at $3.48 billion, missing the $3.55 billion forecast and reflecting a 0.6% decrease year over year.
Despite the earnings falling short, Avis Budget Group continued to focus on pricing and fleet management. CEO Joe Ferraro stated, "Throughout the quarter, we maintained a strong focus on pricing, successfully keeping our daily revenue stable by prioritizing higher margin businesses, which remained almost flat in the Americas."
The company reported adjusted EBITDA of $503 million for the quarter. In the Americas segment, adjusted EBITDA was $384 million, benefiting from an improved vehicle utilization rate, which was balanced against higher fleet costs compared to the same period last year. The international segment generated $139 million in adjusted EBITDA, supported by a 5% increase in rental days and improved vehicle utilization.
As of the end of the quarter, Avis Budget Group's liquidity position, including secured and unsecured loans, was over $1.2 billion. The company repurchased approximately 526,000 shares of common stock for nearly $43 million by October 30.
Looking ahead, Ferraro noted, "The holiday season looks strong, and we believe we are well positioned to capitalize on this demand." However, the company did not provide specific guidance for the upcoming quarter or fiscal year.