Last week Avis Budget Group Inc. (NASDAQ: CAR) raised its first quarter adjusted EPS estimate from a loss of -$0.19 to a gain of $0.13. Apparently no one believed the company because the consensus estimate rose only to a loss of -$0.01. The company also forecast quarterly revenue at $1.6 billion.
Avis made both its forecast numbers this morning, and reaffirmed last week’s full-year EPS guidance for EPS of $2.35-2.65. Analysts didn’t believe that number either, and the consensus EPS estimate rose only to $2.11.
The lack of respect for Avis’s forecast may have been due in part to an announcement from Hertz Global Holdings Inc. (NYSE: HTZ) last Thursday that it had reached an agreement with a potential buyer of the company’s Advantage rent-a-car brand, which could clear the way for Hertz’s acquisition of Dollar Thrifty Automotive Group Inc. (NYSE: DTG). That deal has been on-again, off-again for about two years, and at one time both Avis and Hertz were bidding on Dollar Thrifty.
Like Hertz, Avis revised its fleet costs downward by 3%-8%, based on the lower depreciation rates for its fleet. Used car values have risen and that has helped both companies. Dollar Thrifty reports quarterly results next week and is expected to post EPS of $1.30, up from $1.28 just a week ago, on revenue of $355.53 million.
Shares of Avis closed down -1.3% on Friday at $15.90 in a 52-week range of $8.45-$19.24. There has been no change in the share price in the pre-market so far this morning.