Avis Rises After Forecasting Profit Higher Than Estimates
Avis Budget Group Inc. (CAR), the U.S. auto- rental chain, rose the most in more than two years in New York trading after forecasting annual profit that topped analysts’ estimates on higher values for used cars.
Avis jumped 16 percent to $15.28 at 9:40 a.m., the biggest percentage rise in intraday trading since June 2009. The shares had gained 23 percent this year before today.
Avis, based in Parsippany, New Jersey, said it expects adjusted profit of $2.35 to $2.65 a share this year. Analysts in a Bloomberg survey had predicted $1.59, the average of seven estimates. Fleet costs in North America will be 3 percent to 8 percent lower on a per-unit basis than originally forecast, Avis said in a statement.
“Our recent experience in selling used vehicles in North America has been outstanding, and we have revised our outlook for fleet costs accordingly,” David Wyshner, Avis’s chief financial officer, said in the statement.
Sales in the first quarter were $1.6 billion, the company said in a preliminary statement of results. Four analysts in a Bloomberg survey had estimated $1.61 billion, on average. Annual revenue will be as much as $7.6 billion compared with $7.4 billion, the average of five estimates in a Bloomberg survey. Avis is scheduled to release full first-quarter results May 7.
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