CAR Stock Price | Avis Budget Group Inc. Stock Quote (U.S.: Nasdaq)

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Avis stock rallies as company expects still-strong Q1 sales

Shares of Avis Budget Group Inc. rose more than 7% in the extended session Wednesday after the rental-car company said it expects first-quarter sales modestly below consensus, thanks to a busy January and February. Avis said it expects first-quarter sales between $1.7 billion and $1.8 billion, and a GAAP net loss between $155 million and $165 million for the quarter. It called for adjusted loss between $85 million and $95 million, which would compare with an adjusted loss of $1 million in the first quarter of 2019. Analysts polled by FactSet expect the car-rental company to report an adjusted loss of $1.57 a share on sales of $1.9 billion in the quarter. The company said its January and February sales were “exceptionally strong” and that 2020 had potential to be a record year before the mid-March shutdowns and shelter-in-place orders that halted travel worldwide. April sales appear to have stabilized, down about 80% from the year before, the company said. May sales are likely to be similar, but the company said it expects a recovery in the following months as travel restrictions are eased. “Our current reservations show improvement in June and sequentially increase over the balance of the summer,” Avis said. The company also said it exceeded its previous cost-cutting goals ahead of schedule, “by taking unprecedented actions to preserve liquidity, remove costs and shrink the size of our vehicle fleet.” It cut all non-essential capital and operating expenses and it continues to negotiate breaks with partners and suppliers, it said. As a result, “we believe we will achieve an estimated $2 billion in annualized cost removal and mitigation through our actions to date, and we are prepared to take additional actions as appropriate,” the company said. As of March 31, it had $1.4 billion in cash and equivalents and a revolving credit facility providing it with around $1.6 billion in total liquidity, with no debt maturing until 2023, it said. Avis said it would report first-quarter results after the close on May 4.

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