(CAR) Avis Budget Group Reports Smaller Loss – Grows Revenues

Avis Budget Group Inc. (CAR) posted fourth quarter 2010 net loss of $24 million, compared with a net loss of $49 million in the year-ago period. Excluding extraordinary items, quarterly loss came in at $6 million or 6 cents a share. Loss per share for the quarter was marginally lower than the Zacks Consensus Estimate of a loss of 7 cents and was also an improvement from the prior-year quarter loss of 25 cents a share.

For fiscal 2010, the company reported adjusted net income of $107 million or 90 cents a share, up substantially from a loss of $4 million or 4 cents a share reported in 2009.

The company reported a 6.0% jump in net revenues to $1,226 million from $1,160 million in the year-ago period. Total revenue also surpassed the Zacks Consensus Estimate of $1,201 million. The increase was mainly attributable to a 7% rise in rental days. However, the growth was partially offset by a 2% decline in pricing. Growth in Ancillary revenues of 10% also contributed to the revenue increase.

By segment, domestic car rental revenue rose 4.0% to $905 million in the quarter primarily attributable to a 7% volume expansion. This was partially offset by a 3.0% fall in pricing. International car rental revenue growth was 11% at $235 million while truck rental increased 5.0% to $85 million, both on a year-over-year basis.

The company’s adjusted EBITDA increased more than threefold to $54 million from $14 million reported in the year-ago period. EBITDA margin improved 320 basis points attributable to lower fleet and financing cost and incremental savings from cost-saving initiatives. Avis Budget’s total expenses rose marginally by 1.0% to $1,261 million from $1,248 million in the year-ago quarter. Consequently, the company reported loss before income taxes of $35 million, compared with a loss of $88 million in the year-ago quarter.

The company ended the year with cash and cash equivalents of $911 million and total debt of $2,502 million, compared with $482 million of cash and $2,131 million of debt in the year-ago period.

Avis Budget expects domestic vehicle depreciation costs to be at par or lower on a per unit basis in 2011 compared with 2010. The company is continuing with its efforts to reduce costs and enhance productivity through its Performance Excellence initiative and five-point cost-reduction and efficiency improvement plan.

The company expects its cost-saving initiatives to provide an incremental $45– $55 million of year-over-year savings in 2011. Total annual savings from these initiatives are expected to be more than $550 million in 2011.

Avis Budget Group is the leading general-use vehicle rental company in North America, Australia and New Zealand. Moreover, a formidable network of more than 6,500 rental locations and 350,000 vehicles enables the company to strengthen its well-established position in a highly competitive vehicle rental industry.

The company faces intense competition from other established players, such as Hertz Global Holdings Inc. (HTZ), Enterprise Rent-A-Car, Dollar Thrifty Automotive Group Inc. (DTG) and Ryder System Inc. (R).

Avis Budget shares maintain a Zacks #4 Rank, which translates into a short-term Sell recommendation.

AVIS BUDGET GRP (CAR): Free Stock Analysis Report

DOLLAR THRIFTY (DTG): Free Stock Analysis Report

HERTZ GLBL HLDG (HTZ): Free Stock Analysis Report

RYDER SYS (R): Free Stock Analysis Report

Zacks Investment Research

About vitalstocks

This is a sample profile field. Vitalstocks is the operating company for Stockbloghub. This will place the picture of the author or company in the profile. Here is another extra line of information.


Powered by Facebook Comments

Similar Posts: | | | | | | | | Rental & Leasing Services | Services

RSS feeds: Avis Budget Group Inc | CAR | Dollar Thrifty Automotive Group Inc | DTG | Hertz Global Holdings Inc. | HTZ | R | Ryder System Inc. | Rental & Leasing Services | Services |

Other Posts by | RSS Feed for this author