Avis Budget Group, Inc. today commented on events and trends impacting the vehicle services operating climate and the company’s financial performance.
"The second quarter has turned out to be a significantly more challenging operating environment than expected. As with our entire industry, we are confronting rising fuel costs, weaker-than-expected enplanements, lower commercial travel volumes and lower time and mileage rates per day," said Ronald L. Nelson, Chairman and Chief Executive Officer, Avis Budget Group. "As a result, our second quarter results will be below last year’s."
"We believe that vehicle rental demand in the summer months may outpace supply, as we and others in the industry have trimmed peak fleet levels. This should result in favorable pricing comparisons and our advance reservations would support that view. But the recently announced capacity reductions by the airline industry are expected to contribute to a more difficult fourth quarter operating environment," said Mr. Nelson.
"Given these dynamics, we expect that full-year earnings will be below our 2007 results. In particular, while it is difficult in the current environment to accurately forecast our future results, we currently estimate that our 2008 EBITDA will be approximately $350 million and our 2008 pretax income will be approximately $140 million, excluding any unusual items."
Shares of Avis Budget fell more than 13 percent to $6.33 in morning trade on the New York Stock Exchange, a 16-year low.