Avis Budget Group Inc. (CAR - Free Report) 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.
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. , Healthcare Services Group, Inc. (HCSG - Free Report) and Mitie Group plc (MITFY - Free Report) , 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%.
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Avis Budget Group Inc. (CAR - Free Report) 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.
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. , Healthcare Services Group, Inc. (HCSG - Free Report) and Mitie Group plc (MITFY - Free Report) , 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>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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