Avis BudgetGroup, Inc. CAR reported solid fourth-quarter 2019 results wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings per share of 73 cents beat the Zacks Consensus Estimate by 52% and increased 38% year over year. Total revenues of $2.16 billion outpaced the consensus estimate by 3% and improved 5.5% year over year due to 5% increase in rental days and a 1% increase in revenues per day.
Per-unit fleet costs increased 3% year over year and utilization improved 100 basis points.
Revenues by Segment
Americas segment revenues of $1.53 billion increased 9% year over year. The segment accounted for 71% of total revenues.
International segment revenues of $632 million went down 2% year over year. The segment contributed 29% to total revenues.
Adjusted EBITDA of $143 million improved 1% year over year. Adjusted EBITDA margin was 6.6% compared with 6.9% in the year-ago quarter.
Adjusted EBITDA for Americas was $144 million (up 17% year over year), driven by 8% rental day growth and improved vehicle costs.Internationally, adjusted EBITDA came in at $16 million, down 54% from the prior-year quarter.
Balance Sheet and Cash Flow
Avis Budget exited fourth-quarter 2019 with cash and cash equivalents of $686 million compared with $615 million at the end of the prior quarter. Corporate debt was $3.44 billion compared with $3.48 billion at the end of the prior quarter.
The company generated $655 million of cash from operating activities in the reported quarter. Adjusted free cash flow totaled$161 million and capital expenditures were $72 million.
The company repurchased roughly 2.2 million shares for a total of $62 million in 2019.
Avis Budget unveiled its 2020 guidance for revenues, adjusted earnings, adjusted net income, adjusted pretax income, adjusted EBITDA and adjusted free cash flow.
Revenues are anticipated in the range of $9.4-$9.6 billion. The current Zacks Consensus Estimate of $9.34 billion lies below the guided range.
Adjusted EPS is expected between $3.75 and $4.75. The current Zacks Consensus Estimate of $3.75 matches the lower end of the guided range.
Further, adjusted net income is projected in the range of $250-$350 million. Adjusted pretax income is expected between $375 million and $475 million. Adjusted EBITDA is anticipated in the range of $750-$850 million. Adjusted free cash flow is expected between $275 million and $325 million.
Zacks Rank & Stocks to Consider
Currently, Avis Budget carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the broader Zacks Business Services sector are awaiting fourth-quarter 2019 earnings of key players like Stericycle SRCL, ICF International ICFI and ServiceMaster SERV, each slated to release their results on Feb 27.
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