Avis Budget Group Meets on the Top Line, Misses Where It Counts

Seth Jayson, The Motley Fool
Updated

Avis Budget Group (NAS: CAR) reported earnings on Feb. 15. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Avis Budget Group met expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP loss per share increased.

Gross margins expanded, operating margins dropped, net margins shrank.

Revenue details
Avis Budget Group reported revenue of $1.63 billion. The six analysts polled by S&P Capital IQ looked for revenue of $1.65 billion on the same basis. GAAP reported sales were 33% higher than the prior-year quarter's $1.23 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at -$0.14. The seven earnings estimates compiled by S&P Capital IQ predicted $0.06 per share on the same basis. GAAP EPS were -$1.62 for Q4 against -$0.22 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 23.8%, 410 basis points better than the prior-year quarter. Operating margin was 7.1%, 170 basis points worse than the prior-year quarter. Net margin was -10.4%, 840 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.61 billion. On the bottom line, the average EPS estimate is -$0.09.

Next year's average estimate for revenue is $7.40 billion. The average EPS estimate is $1.56.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 241 members out of 367 rating the stock outperform, and 126 members rating it underperform. Among 97 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 62 give Avis Budget Group a green thumbs-up, and 35 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Avis Budget Group is buy, with an average price target of $21.81.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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