Please ensure Javascript is enabled for purposes of website accessibility

Shares of Avis Budget Group Drop 14% After Mixed Q2 and Updated Guidance

By Daniel Miller - Aug 8, 2018 at 2:16PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Avis didn't have a bad second quarter, and earnings per share managed to top estimates, but shares are trending lower Wednesday.

What happened

Shares of Avis Budget Group (CAR 8.61%), a provider of automotive vehicle rental and car sharing services with brands including Avis, Budget, and Zipcar, are down 14% as of 12:46 p.m. EDT Wednesday after the company released second-quarter results.

So what

Revenue increased 4% to a record $2.3 billion during the second quarter, still falling short of analysts' estimates. Adjusted earnings per share (EPS) checked in at $0.57, well ahead of the prior year's $0.30 per-share mark and ahead of analysts' estimates calling for $0.55 per share.

Row of cars parked at a dealership lot

Image source: Getty Images.

"We made a number of strategically important tuck-in acquisitions during the quarter and are also very excited about our recent announcements regarding Amazon, Lyft and Luxury Retreats, which was acquired by Airbnb in February 2017, as we expand our reach to include some of the leading innovators in their respective industries." Said Larry De Shon, Avis Budget Group president and chief executive officer, in a press release.

Now what

Despite management's mostly positive spin on the quarterly results, its guidance update was mixed. The company lowered full-year 2018 revenue guidance from $9.2 billion to $9.45 billion down to $9.05 billion to $9.30 billion, but also raised its full-year EPS estimate from $2.90 to $3.75 up to $3.00 to $3.85 per share. Part of Avis' decline Wednesday is likely due to hyped expectations. Remember, just yesterday its competitor Hertz Global Holdings Inc. (HTZG.Q) posted such a strong second quarter its shares popped more than 20%, which pulled Avis' shares up in anticipation of its own second-quarter earnings due later that day. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Avis Budget Group, Inc. Stock Quote
Avis Budget Group, Inc.
$200.98 (8.61%) $15.94
Hertz Global Holdings, Inc. Stock Quote
Hertz Global Holdings, Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.