Avis Budget Group Inc. CAR reported better-than-expected third-quarter 2020 results. The earnings beat, however, failed to impress investors as the stock declined 16.8% since the earnings release. So far this year, shares of Avis Budget have lost 5.4% compared with 18.7% decline of the industry it belongs to.



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Adjusted earnings (excluding 50 cents from non-recurring items) per share of $1.13 beat the Zacks Consensus Estimate by more than 100% but fell 61.8% year over year. Total revenues of $1,534 million also surpassed the consensus estimate by 8.4% but declined 44.3% year over year due to 42% decline in rental days and 5% fall in revenues per day (excluding exchange rate effects).

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Avis Budget anticipates adjusted free cash flow and adjusted EBITDA to be both positive for the fourth quarter of 2020.

Revenues by Segment

Americas segment revenues of $1,114 million declined 40% year over year. The segment contributed 72.6% to total revenues.

International segment revenues of $420 million fell 53% year over year. The segment contributed 27.4% to total revenues.

Profitability

Adjusted earnings before interest, taxes, depreciation and amortization (EBIDA) was $220 million against $471 million in the prior-year quarter. The company resorted to various cost-reduction strategies and removed approximately $1 billion of costs during the third quarter, bringing the total to $2 billion year to date.

Adjusted EBITDA for Americas was $222 million against gain of $321 million in the prior-year quarter. Internationally, adjusted EBITDA was $6 million compared with a profit of $169 million in the prior-year quarter.

Avis Budget Group, Inc. Price, Consensus and EPS Surprise



chart, line chart: Avis Budget Group, Inc. Price, Consensus and EPS Surprise


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Avis Budget Group, Inc. Price, Consensus and EPS Surprise

Avis Budget Group, Inc. price-consensus-eps-surprise-chart | Avis Budget Group, Inc. Quote

Balance Sheet and Cash Flow

Avis Budget exited third-quarter 2020 with cash and cash equivalents of $1.56 billion compared with $1.26 billion at the end of the prior quarter. Corporate debt was $4.2 billion compared with $3.9 billion at the end of the prior quarter.

The company generated $282 million of net cash from operating activities in the reported quarter. Adjusted free cash flow generated was $100 million and capital expenditures were $21 million in the reported quarter.

Currently, Avis Budget carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Business Services Companies

Equifax EFX reported better-than-expected third-quarter 2020 results, with adjusted earnings of $1.87 per share that beat the Zacks Consensus Estimate by 16.2% and rising 26.4% on a year-over-year basis. The reported figure exceeded the guidance of $1.30-$1.40.

The Interpublic Group of Companies IPG reported better-than-expected third-quarter 2020 adjusted earnings of 53 cents per share, which beat the Zacks Consensus Estimate by 43.2% and rose 8.2% on a year-over-year basis.

IQVIA Holdings IQV reported solid third-quarter 2020 adjusted earnings per share of $1.63, which beat the consensus mark by 8% and inched up 1.9% on a year-over-year basis. The reported figure was above the guidance of $1.47-$1.55.

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