Avis Budget Group Inc (CAR)

[Mr B]

Avis Budget Swings To 2Q Loss On Lower VolumesLast update: 8/4/2009 4:41:33 PM

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; [e-mail]