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Avis Budget's (CAR) Record Revenues Drive Q3 Earnings Beat
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Avis Budget Group Inc. (CAR - Free Report) reported record third-quarter 2017 results with adjusted earnings of $260 million or $3.10 per share compared with $227 million or $2.47 per share in the prior-year quarter. Adjusted earnings comfortably beat the Zacks Consensus Estimate of $2.97.
GAAP earnings for the quarter were $245 million or $2.91 per share compared with $209 million or $2.28 per share in the year-ago quarter, primarily driven by all-time high revenues.
Revenues for the reported quarter were $2,752 million compared with $2,656 million in the year-ago quarter. The year-over-year increase was largely attributable to pricing and utilization improvement in the Americas, strong volume growth and stringent cost-cutting initiatives. However, revenues missed the Zacks Consensus Estimate of $2,776 million.
Avis Budget Group, Inc. Price, Consensus and EPS Surprise
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $482 million compared with $469 million in the year-ago quarter, driven by higher per-unit fleet costs in both its segments.
Segmental Performance
Americas reported revenues of $1,839 million compared with $1,821 in the prior-year quarter, primarily due to 2% increase in time and mileage revenue per day. Per-unit fleet costs increased 5% to $326.
The International segment’s revenues were up 9% year over year to $913 million, due to 6% benefit from FranceCars which was acquired in December 2016.
Financials
Avis ended the quarter with cash and cash equivalents of $814 million. For the first nine months of 2017, the company generated $2,041 million as cash flow from operating activities. It reported adjusted free cash flow of $473 million during the same period. Avis repurchased 783,000 shares worth $27 million during the quarter, bringing the year-to-date tally to 4.2 million shares for $127 million.
Guidance
The company updated its guidance for full-year 2017. It expects revenues to be in the range of $8,800 million to $8,900 million. In the Americas segment, per-unit fleet costs are expected to be up 6.5-7%. Adjusted EBITDA is expected to be in the range of $725 million to $745 million.
Adjusted earnings per share are expected between $2.45 and $2.65, narrowed from the earlier expectation of $2.40-$2.85. The company expects to repurchase $200 million worth of shares in 2017.
SGS SA has a long-term earnings growth expectation of 6%.
Core-Mark has a long-term earnings growth expectation of 10%.
SPS Commerce has a long-term earnings growth expectation of 25%. It has beaten earnings estimates in each of the trailing four quarters with a positive surprise of 18.8%.
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Avis Budget's (CAR) Record Revenues Drive Q3 Earnings Beat
Avis Budget Group Inc. (CAR - Free Report) reported record third-quarter 2017 results with adjusted earnings of $260 million or $3.10 per share compared with $227 million or $2.47 per share in the prior-year quarter. Adjusted earnings comfortably beat the Zacks Consensus Estimate of $2.97.
GAAP earnings for the quarter were $245 million or $2.91 per share compared with $209 million or $2.28 per share in the year-ago quarter, primarily driven by all-time high revenues.
Revenues for the reported quarter were $2,752 million compared with $2,656 million in the year-ago quarter. The year-over-year increase was largely attributable to pricing and utilization improvement in the Americas, strong volume growth and stringent cost-cutting initiatives. However, revenues missed the Zacks Consensus Estimate of $2,776 million.
Avis Budget Group, Inc. Price, Consensus and EPS Surprise
Avis Budget Group, Inc. Price, Consensus and EPS Surprise | Avis Budget Group, Inc. Quote
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $482 million compared with $469 million in the year-ago quarter, driven by higher per-unit fleet costs in both its segments.
Segmental Performance
Americas reported revenues of $1,839 million compared with $1,821 in the prior-year quarter, primarily due to 2% increase in time and mileage revenue per day. Per-unit fleet costs increased 5% to $326.
The International segment’s revenues were up 9% year over year to $913 million, due to 6% benefit from FranceCars which was acquired in December 2016.
Financials
Avis ended the quarter with cash and cash equivalents of $814 million. For the first nine months of 2017, the company generated $2,041 million as cash flow from operating activities. It reported adjusted free cash flow of $473 million during the same period. Avis repurchased 783,000 shares worth $27 million during the quarter, bringing the year-to-date tally to 4.2 million shares for $127 million.
Guidance
The company updated its guidance for full-year 2017. It expects revenues to be in the range of $8,800 million to $8,900 million. In the Americas segment, per-unit fleet costs are expected to be up 6.5-7%. Adjusted EBITDA is expected to be in the range of $725 million to $745 million.
Adjusted earnings per share are expected between $2.45 and $2.65, narrowed from the earlier expectation of $2.40-$2.85. The company expects to repurchase $200 million worth of shares in 2017.
Avis currently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the industry include SGS SA (SGSOY - Free Report) , Core-Mark Holding Company, Inc. and SPS Commerce, Inc. (SPSC - Free Report) , each carrying Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SGS SA has a long-term earnings growth expectation of 6%.
Core-Mark has a long-term earnings growth expectation of 10%.
SPS Commerce has a long-term earnings growth expectation of 25%. It has beaten earnings estimates in each of the trailing four quarters with a positive surprise of 18.8%.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>