HTZ - Avis Budget gains after posting better-than-feared profit for Q2

2023-07-31 16:20:27 ET

Avis Budget Group ( NASDAQ: CAR ) moved higher in after-hours trading on Monday after topping EPS expectations with its Q2 earnings report .

Revenue was down 4% compared to a year ago to $3.1B. The Americas segment saw a drop in revenue of 5%, while the international segment saw revenue increase by 3%. Net income was $436M vs. $774M a year ago and adjusted EBITDA was down 39% to $737M. EPS was down 30% from a year ago, but beat the consensus estimate by a wide margin. Total rental days were up 4% to 44.2M. Revenue per day fell 7% to $70.65 and per-unit fleet per month were up 56% to $182, which both contributed to the lower level of profitability.

The Americas' business saw adjusted EBITDA fall 39% year-over-year to $631M, driven by strong demand and improved utilization. The company's international segment churned up adjusted EBIDTA that was 31% lower than a year ago at $126M, driven by strong seasonally increasing volume.

The update from Avis Budget ( CAR ) on its balance sheet was fairly positive. CAR had a liquidity position at the end of the quarter of approximately $1.1B, with an additional $1.1B of fleet funding capacity. The car rental giant said it has well-laddered corporate debt and no meaningful maturities until mid-2025 after giving effect to its euro note repayment in September.

CEO update: "Our strong second quarter results continued to showcase the earnings power of our Company... Summer travel has continued to be robust with elevated peak period demand and seasonally improved pricing."

Shares of Avis Budget Group ( CAR ) rallied 2.37% in the after-hours session on Monday. Peer Hertz Global ( HTZ ) was 1.28% lower.

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