Avis Budget shares tumble 15 percent after cutting full-year revenue forecast
Avis Budget shares dropped on Wednesday after reporting a full-year revenue forecast below estimates.
Shares of the rental car company fell 15.2 percent at $32.86 per share after the company said it expects full-year revenue between $9.05 billion and $9.3 billion. Analysts were expecting revenue of $9.27 billion for the year, according to Thomson Reuters.
Avis Budget said costs of launching recent partnerships could affect profit in the remainder of the year. On Monday, Avis Budget announced a multiyear deal with ride-share company Lyft that would allow North American Lyft Express drivers to use Avis vehicles rather than purchasing and using their own vehicles. The program is expected to make thousands of Avis cars available starting in the next few months.
The company gave a full-year earnings outlook of between $3.00 and $3.85 per share after previously expecting earnings of $2.90 to $3.75.
Still, the company's second-quarter earnings and revenue matched estimates, with a quarterly profit of 57 cents per share, in line with estimates, according to Thomson Reuters. Revenue was also nearly in line with expectations at $2.3 billion for the quarter, just below estimates of $2.5 billion by a consensus of analysts from Thomson Reuters.
"Our strong second quarter results reflect continued global volume growth and higher underlying pricing in the Americas leading to meaningful margin improvement," said CEO Larry De Shon in a release on Tuesday. "We made a number of strategically important tuck-in acquisitions during the quarter and are also very excited about our recent announcements regarding Amazon, Lyft and Luxury Retreats."
The company made a deal to offer discounts to Amazon customers and a deal with Airbnb's Luxury Retreats to serve as the official partner of the villa rental company.