Avis Budget Group (NASDAQ:CAR), a leading global provider of mobility solutions through Avis, Budget, and Zipcar, among others, traded over 17% higher Thursday morning after releasing better-than-expected fourth-quarter earnings. Avis' earnings beat was even enough to pull up shares of competitor Hertz Global Holdings (OTC:HTZG.Q), which is due to report results next week.
Starting from the top, Avis' revenues grew 2% to $2.1 billion during the fourth quarter, right in line with analysts' estimates, and that closed the book on its ninth consecutive year of revenue growth. Adjusted earnings per share jumped 18% during the fourth quarter to $0.53 and increased 28% to $3.65 for the full year 2018. Avis' fourth-quarter EPS topped analysts' estimates calling for $0.37. Another positive figure for investors to digest was Avis' Americas per-unit fleet costs declining 7% during the fourth quarter, excluding exchange rate impacts.
"We ended the year strong, reporting record fourth quarter Adjusted EBITDA and Adjusted earnings per share, driven by a more than 2% increase in Americas pricing and substantially lower overall per-unit fleet costs," said Larry De Shon, Avis Budget president and CEO, in a press release.
Investors are starting to warm up to Avis after the stock shed almost half its value during 2018.
One driving force for Avis' early 2019 rebound was Goldman Sachs reversing its sell opinion to a buy and slapping a fresh $35 price target on the stock. However, despite its recent stock price rebound, expanding margins, and a ninth consecutive year of revenue growth, management still has work to do innovating products and brands for a broader mobility solutions world and a rapidly evolving automotive industry.