Avis Budget reports losses for 4Q - Car Rental News
Avis Budget reports losses for 4Q
Car Rental News - 26/02/2009
The rental car giant posted greater-than-expected losses on lower rental volumes and declining used car values.
Avis Budget is expecting that the unfavorable conditions in both the credit and the used car markets will continue, and that demand will be slow through the first half of the year.
The group cut 2,200 jobs and shut down nine rental outlets last year, and has indicated that it will continue to control costs, adjusting fleet levels to reflect weakening demand – keeping fleet utilization levels consistent with those of 2008.
A net loss from continuing operations of $121 million, or $1.20 per share was recorded for the final quarter of 2008, as compared with $1.05 billion, or $10.16 per share, one year earlier.
Excluding one-time items, the company’s net loss from continuing operations amounted to $1.08 a share. Analysts had expected the loss to be approximately 30 cents per share.
Revenue for the final quarter dropped by nine percent, down to $1.26 billion, in line with expectations.
Car rental revenues fell by nine percent for the quarter, mostly a result of a six percent drop in the number of rental days and per-day time and mileage revenues.
Avis Budget’s fleet costs rose by 11 percent for the quarter, and the average fleet size fell by five percent.