Avis Budget Group Inc.'s (CAR) fourth-quarter loss narrowed as
the car-rental company reported higher volume in North America and
markets abroad, though the company issued a mixed outlook for the
new year.
Avis is coming off a strong 2012, when results were aided by a
robust domestic used-car market early in the year that helped keep
fleet costs low. Sales for the year soared 25%, as the company also
benefited from a $1 billion deal to take full control of Avis
Europe in October 2011. But top-line growth this year is expected
to slow considerably for Avis as it faces a lofty comparison.
The company is staying on an acquisitive path, last month
unveiling a $500 million deal to buy its car-sharing operator
Zipcar Inc. (ZIP). That deal, expected to close by April, would
vault Avis ahead of its peers in addressing the niche hourly rental
market.
Excluding the pending acquisition of Zipcar, Avis sees 2013
adjusted earnings of $1.90 to $2.45 a share on revenue of about
$7.6 billion to $7.8 billion. Analysts surveyed by Thomson Reuters
expected a profit of $2.48 a share on $7.59 billion in revenue.
For the fourth quarter, Avis reported a loss of $46 million, or
43 cents a share, compared with a prior-year loss of $170 million,
or $1.62 a share. Excluding transaction-related costs and other
impacts, the adjusted loss narrowed to 7 cents a share from 14
cents. Revenue jumped 4.2% to $1.7 billion.
Analysts surveyed by Thomson Reuters expected a per-share loss
of 7 cents on revenue of $1.63 billion.
Revenue growth in the latest quarter was driven by rental day
volume gains. Ancillary revenue, excluding gas and customer
recoveries, jumped 8% due to higher sales of insurance products and
emergency roadside protection.
North American car rental revenue increased 4.8% as volume
jumped, offsetting a slight decline in pricing. Avis said pricing
improved throughout the quarter, and was up 1% in December.
Rental revenue grew 3.4% internationally, as volume growth
offset lower pricing partially due to the strong growth of the
Budget brand in Europe. Avis is expanding the Budget brand abroad
by adding new rental facilities and targeting small- and
medium-sized businesses as part of a new branding strategy.
Shares were up 0.9% to $23.26 after hours. The company's
conference call is scheduled for Thursday.
-Write to John Kell at john.kell@dowjones.com
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