Avis Budget Group Inc. stock tanked in the extended session Thursday after the car-rental company posted an adjusted third-quarter profit well bellow market expectations.
Avis
said it earned $189 million, or $2.50 a share, in the quarter, compared with $213 million, or $2.68 a share, in the year-ago period.
Adjusted for one-time items, Avis earned $223 million, or $2.96 a share, compared with $265 million, or $3.33 a share, a year ago.
Revenue fell slightly to $2.75 billion from $2.78 billion a year ago.
Analysts polled by FactSet expected adjusted earnings of $3.64 a share on sales of $2.84 billion.
Avis made “further progress” on partnerships with ride-hailing companies where it said it increased its ride-hail fleet by nearly 60% from the previous quarter.
“We remain focused on improving our core rental car business, while driving innovation to continue our transformation into a mobility service provider,” Chief Executive Larry DeShon said in a statement.
Avis and other car-rental companies have felt the pinch of people eschewing rentals in favor of ride-hailing and ride-sharing, as well as of an oversupplied used-car market. Car-rental businesses have to off-load thousands of vehicles they retire from their rental fleets.
Avis shares have gained 33% this year, compared with gains of 21% and 16% for the S&P 500
and the Dow Jones Industrial Average.
