Shares of Avis Budget Group Inc. (CAR) rose over 3% in the after-hours session on Monday following the release of the company’s quarterly earnings report. The car-rental company exceeded Wall Street expectations due to robust demand for rentals during the summer travel season.
Quarterly Profit and Revenue
Avis earned $436 million, or $11.01 per share, in the second quarter. Although this was lower than the $774 million, or $15.71 per share, earned in the same period last year, it still surpassed analyst estimates. Revenue for the quarter declined by 4% to $3.1 billion.
Strong Demand and Expectations
The strong performance can be attributed to the high demand for rentals during the summer travel season. Analysts polled by FactSet had expected Avis to report earnings per share of $9.45 on sales of $3.2 billion.
Liquidity and Funding Capacity
As of the end of the quarter, Avis reported approximately $1.1 billion in liquidity and an additional $1.1 billion of fleet funding capacity. The company stated that it has well-laddered corporate debt and does not have any significant maturities until mid-2025 after repaying its euro note in September 2023.
CEO’s Statement
Chief Executive Joe Ferraro expressed his satisfaction with the strong second-quarter results, emphasizing the earnings power of the company. He credited the hard work of the team and their exceptional ability to capitalize on the increasing travel demand environment. Ferraro highlighted that summer travel remained robust, with peak period demand at elevated levels and improved pricing compared to previous seasons.
Overall, Avis Budget Group Inc.’s second-quarter performance demonstrated their resilience amidst challenging market conditions. Their ability to adapt to changing trends and capitalize on increased travel demand positions them well for future success.
