Avis Budget Group has reported revenue of $1.8 billion for its first quarter 2017, a 2% decrease. This is primarily due to a 5% decline in pricing partially offset by a 3% increase in rental days, according to the company.
In the first quarter, Avis Budget reported an adjusted earning loss of $27 million and an adjusted net loss of $107 million. According to the company, results were affected by lower pricing and higher per-unit fleet costs in the Americas.
For the Americas (North America, South America, Central America, and the Caribbean), revenue declined 4% primarily due to a 1% increase in rental days offset by a 4% decline in pricing, according to the company. Per-unit fleet costs rose 7% to $333 per month. Adjusted earnings decreased to a $20 million loss due to lower revenue and the higher per-unit fleet costs.
“Our first quarter results reflect higher-than-expected fleet costs, continued pricing pressures, and a shift of Easter traffic to the second quarter,” said Larry De Shon, CEO of Avis Budget Group. “We have taken meaningful actions to reduce costs by more than $50 million to mitigate the effects of weak vehicle residual values. We are optimistic that our results will be stronger over the balance of the year as used-car values began to improve near the end of the quarter and our strategic initiatives continue to gain momentum.”
For the full-year 2017, Avis Budget updated its estimates of adjusted earnings. Now the company expects that full-year revenue will increase 2% to 3% to $8.8 to $8.95 billion. Movements in currency exchange rates are projected to negatively impact revenue growth by approximately $75 million. Total company per-unit fleet costs are expected to be $285 to $295 per month in 2017, compared to $285 in 2016.
In its quarterly report filed with the Securities and Exchange Commission (SEC), Avis Budget announced the termination of approximately 335 employees. As of March 31, the company had terminated around 240 of these employees.