Avis Budget Group released their second quarter financial results this week. They posted an earning of $0.30 per share and a revenue of $2.24 billion. After the release of their report, the stocks were traded at a 10 per cent drop. The sharp decline in stock value is because the company's posted earnings of $0.30 per share missed Wall Street's estimates of $0.54 per share. However, the company's revenue figure of $2.24 billion barely beat the Zacks Consensus Estimate of $2.23 billion. Avis reported flat revenue growth from a year ago. The company had seen an increase in overall rental days but the gains were negated by a decrease in overall pricing. The car rental company also suffered lower than expected growth in the Americas, while international revenue growth was sparked by the acquisition of FranceCars.
The company had posted an adjusted net income of $25 million. The company's adjusted EBITDA dropped from $204 million a year ago to $140 million. Avis also repurchased $50 million worth of shares in the quarter, or 1.9 million of common stock. An updated 2017 revenues expectations moved to between $8.8 billion and $8.95 billion. The company also adjusted EPS guidance to between $2.40 per share and $2.85 per share. The company also reported that they found an additional $25 million in cost savings opportunities, which would bring the annual total to $75 million.
President and CEO Larry De Shon said in a statement, "Our second quarter results in the Americas reflected both a four per cent reduction in pricing resulting from industry over-fleeting and higher per-unit fleet costs due to lower used-vehicle values." "Consequently, we have identified $25 million of additional savings opportunities globally, bringing out total expected savings this year to $75 million, and have lowered our full-year earnings guidance to reflect the difficult first half. Industry fleet levels in the Americas normalized to demand towards the end of the second quarter. This enabled us to transition improved pricing, with revenue per day up more than one per cent in July. Looking forward, I am now more optimistic that the industry issues we've been contending with should be behind us."