DOW JONES NEWSWIRES
Avis Budget Group Inc. (CAR) swung to a second-quarter loss -
its sixth loss in the past seven quarters - on lower volumes, but
the car-rental company said volumes stabilized in the period.
"While we continued to face sharply reduced demand for vehicle
rentals in the second quarter, rental volumes did stabilize, and
the actions we took to keep fleet levels in line with demand
allowed us to achieve a stronger-than-expected 7% increase in
domestic time and mileage revenue per day," said Chief Executive
Ronald Nelson.
The car-rental industry has been hurt by a sharp drop in travel,
the credit crunch and difficulties selling used cars. Avis, which
had the largest U.S. market share in 2008, has been cutting jobs
and other costs, raising prices and adjusting its fleet size. Last
month, it sold $450 million in asset-backed notes, the first such
sale by a car-rental company since 2007.
For the latest quarter, Avis reported a loss of $6 million, or 6
cents a share, compared with a profit of $15 million, or 15 cents a
share, a year earlier.
Revenue dropped 17% to $1.31 billion and expenses declined 15%
to $1.31 billion.
Analysts' estimates were for a loss of 15 cents a share on
revenue of $1.41 billion, according to a poll by Thomson
Reuters.
Rental days dropped 21%, while time and mileage per day revenue
increased 4.4% and 7% excluding currency changes.
Competitor Hertz Global Holdings Inc. (HTZ) last week said
second-quarter profit dropped 92% amid a sharp drop in car- and
equipment-rental revenue, though earnings still topped the
company's expectations.
Avis shares closed at $8.94, up 1.1%, and were inactive in
after-hours trading. The stock has soared from a multidecade low of
34 cents in March but is still down nearly a quarter since
September.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com