Avis Budget Group released its Q3 results today, reporting a revenue of $2.8 billion, a new record for the company.
"Our Americas segment delivered record profits and a 50 basis point margin improvement in the third quarter driven by increased volume, higher underlying pricing, and substantially lower per-unit fleet costs, partially offset by a challenging European environment this summer," Larry De Shon, Avis Budget Group president and chief executive officer, said in a statement. "As we enter the fourth quarter, industry fleet levels in the Americas are tight, leading to the best pricing environment we’ve seen in some time. As a result, we currently anticipate Americas revenue per day to increase for the fourth quarter and initial expectations for 2019 are looking good, helped by our new revenue management system, improving ancillary revenues, and the absence of the impact of loyalty accounting."
The company's corporate debt was approximately $3.6 billion at the end of the third quarter and cash and cash equivalents totaled $605 million, compared to $3.6 billion of corporate debt and $611 million of cash and cash equivalents at Dec. 31, 2017.
Avis reported the following results:
- Revenues grew to a record $2.8 billion in the third quarter on both higher volume and increased underlying pricing in the Americas
- Americas per-unit fleet costs reduced by 10%
- Net income of $213 million and earnings per diluted share of $2.68
- Adjusted net income increased 2% to $265 million and adjusted earnings per diluted share of $3.33 were 7% higher
- Adjusted EBITDA was $476 million with Americas delivering a record quarter
Revenues during the quarter were essentially in-line with the prior year, with 1% higher rental volumes being offset by a $9 million negative effect from currency exchange rate movements. Revenue per day was unchanged primarily due to the change in loyalty accounting, but pricing under our historical T&M per day metric increased 1%.
Adjusted EBITDA increased 3% to a record $313 million in the quarter with the benefit of volume growth and 10% lower per-unit fleet costs being partially offset by increased vehicle interest expense, higher gasoline expense, and lower utilization related to record number of vehicle recalls.
Revenue growth in the quarter was driven by 7% higher volume, despite the challenging European leisure environment this summer, partially offset by 2% lower Revenue per day excluding exchange rate effects and a $22 million, or 2% impact from currency exchange movements.
Adjusted EBITDA was $178 million for the quarter with the benefit of revenue growth being offset by a 3% increase in per-unit fleet costs excluding exchange rate effects, higher airport concession fees, increased marketing and a $5 million impact from currency.
The company today updated its estimated full-year 2018 results as follows (estimates in millions):
- Revenues: $9,100 - $9,200
- Adjusted EBITDA: $760 - $800
- Adjusted pretax income: $370 - $410
- Adjusted net income: $265 - $300
- Adjusted diluted earnings per share: $3.30 - $3.70
- Adjusted free cash flow: $325 - $375
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