Avis Budget (CAR -6.90%) stock got totaled for a 9% loss through 2:55 p.m. ET Wednesday after missing badly on earnings.
Analysts had forecast Avis would earn $2.07 per share on $3.1 billion in revenue in Q2. Actual revenue came in at just $3 billion, however, and earnings were only $0.98 per share -- less than half the expected profit.
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Avis Budget Q2 earnings
Not all the news was bad. Avis notes that Total Company Vehicle Utilization reached 72.6%, up 1.9 percentage points year-over-year, with improvement even stronger in the Americas. And per-unit fleet costs declined by 4%.
The news on earnings is arguably even better. Although it's true that Avis earned less than expected, its earnings calculated under generally accepted accounting principles (GAAP) -- $0.98 per share -- were still up nearly 10x from the $0.10 Avis earned in the year-ago quarter.
Despite these positive developments, however, Avis's revenues declined by 1% year over year.
NASDAQ: CAR
Key Data Points
What's next for Avis
Avis did not provide guidance for the coming quarters or for the year in its earnings release. CEO Brian Choi did note, however, that Avis is in the process of resizing its fleet to better match customer demand, and this move seems reflected in the better utilization rate.
Wall Street is expecting to see continued, gradual, but modest improvement this year. Q3 sales, for example, are expected to be up less than 2% year over year, and profits up even less than that. Full-year earnings, on the other hand, should flip from a loss in 2025 to a profit in 2026. True, the total profit this year should be only $3.41 per share as the business completes its turnaround.
But it's a start.
