It's No Trick, All Treat for These 2 Stocks on Halloween Night

Stock markets moved lower in the regular trading session on Monday, but the modest declines weren't enough to wipe out what was unquestionably a strong October on Wall Street. Monthly gains for the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite ranged from 4% to 14%.

Data source: Yahoo! Finance. Chart by author.

Late Monday afternoon, a couple of companies reported quarterly results that made their shareholders quite happy. Avis Budget Group (CAR -3.18%) has ridden the wave of interest in rental and used vehicles higher and has continued to benefit from the explosive growth in travel activity lately. Meanwhile, Trex (TREX 0.20%) stayed on top of trends favoring consumers working on renovating their own homes. Read on to learn more about both companies and their prospects.

Avis drives on

Shares of Avis Budget Group were up nearly 5% in after-hours trading Monday afternoon. The rental car giant kept up its momentum with strong third-quarter financial results.

Avis Budget's numbers for the period were impressive. Sales climbed 18% to $3.5 billion, setting a new top-line record as the company saw both higher demand and an increase in per-day revenue. Net income was the strongest in the rental car specialist's history.

Avis also managed to improve efficiency. The company implemented its QuickPass program at major airports across the U.S., allowing customers to choose vehicles and use an automated exit to avoid waiting in lines at airport counters. Moreover, even though CEO Joe Ferraro noted increasing concerns about a potential economic slowdown or recession, he still sees both the business and leisure segments doing well into the holiday season.

With interest rates rising, Avis also put to rest any worries about its balance sheet, citing $1.7 billion in liquidity and $2.6 billion in fleet funding capacity beyond that. Investors hope that Avis will, therefore, be able to keep growing, expanding its fleet to include more electric vehicles and capitalizing on strong demand as long as it lasts.

Trex deals with the housing slowdown

Elsewhere, shares of decking materials specialist Trex climbed nearly 2% in after-hours trading. The company reported third-quarter results that looked scary on their face, but investors were pleased with the steps Trex is taking to prepare for tough economic times ahead.

Trex's numbers were weak. Sales fell by 44% from the year-ago period to $188 million, led by a sizable decline in residential sales volumes that weighed on results. Retailers carrying Trex products drew down their inventories rather than reordering products, hurting near-term results. The resulting drop in volume sent margin figures plunging, and even with efforts to control costs, Trex's net income of $14 million was down more than 80% year over year.

However, Trex did maintain its belief that it would finish the year on a relatively positive note. The company reaffirmed its guidance for sales to come in between $180 million and $190 million in the fourth quarter. Trex also anticipates continuing to spend on its planned Arkansas facility to support the production of its outdoor living products.

CEO Bryan Fairbanks acknowledged that tough economic conditions, particularly as they affect the housing market, could lead to a pause in growth. However, with long-term trends favoring residential investment -- and with its sustainable and socially responsible products carrying broad-based appeal in the market -- Trex believes it will be ready to capitalize on renewed demand when it comes.