Better than expected results for the third quarter propelled Avis Budget Group Inc. (NASDAQ:CAR) higher Thursday.
The stock closed at $36.49, up 12.8%, on volume of 11.34 million.
Technically, the stock appeared to make a double top on the daily chart on August 8 and September 27 at the $39.30 level, but the decline thereafter found support at the 200-day moving average. Yesterday’s surge has taken the stock past the 50-day moving average, and if the stock can get past $39.30, its uptrend would be confirmed.
Avis Budget Group Inc. (NASDAQ:CAR) beats Wall Street estimates
For the third quarter, Avis reported EPS of $2.47 which beat estimates by $0.13 and revenue of $2.66 billion, which beat by $10 million and was up 3.1% year on year.
The company reported net income of $209 million (up 14% year on year) and adjusted EBITDA of $469 million (up 9% year on year).
“Our record third quarter results reflect continued strength in our pricing in the Americas and benefits from our initiatives to drive profitability, resulting in the highest quarterly Adjusted EBITDA margin in our Company’s history,” said Larry De Shon, Chief Executive Officer in a statement.
The revenue increase was attributed to a pricing effect of +2% in the Americas and an increase of 4% in International rental days.
Avis Budget Group Inc. (NASDAQ:CAR) lowers guidance but investors unfazed
The company expects that for the full year 2016, it will clock revenue of $8.75 billion – a growth of 3%. Adjusted EBITDA is expected to be at approximately the low end of the previously estimated range of $850 to $900 million, including an approximately $20 million hit from foreign currency movements.
The EPS for the full year is expected at $2.93, while free cash flow is estimated at $450 to $500 million.
Avis is planning to repurchase $370 to $400 million of common stock in 2016.
Regarding the guidance, CEO Larry D. De Shon said on the conference call: “In a year that has seen significantly negative first quarter pricing, fleet cost pressures, and an unstable geopolitical climate, this will be a meaningful accomplishment.”