Shares of Avis Budget Group Inc. (CAR) rallied nearly 10% in the extended session Tuesday after the car-rental company said it capitalized on the recovering used-car market to sell more vehicles than planned, shrinking its fleet to match demand dented by the coronavirus pandemic, and that it saw more people renting cars for leisure in recent weeks. Avis said it lost $481 million, or $6.91 a share, in the second quarter, versus a profit of $62 million, or 81 cents a share, in the year-ago period. Adjusted for one-time items, Avis lost $388 million, or $5.60 a share, in the quarter, contrasting with a profit of 79 cents a share a year ago. Sales fell 67% year-over-year to $760 million. Analysts polled by FactSet had expected an adjusted loss of $5.68 a share on sales of $719 million. Avis said it ended the quarter with liquidity around $1.5 billion. It had estimated a cash burn around $900 million, but the quarter's cash burn was $580 million, "due to continued vigilance around expense control and stronger than anticipated vehicle fleet disposals," it said. Avis said rental volumes have shown consistent increases every week since early April, and last week it scored its best volume to date in the U.S. and internationally on "increased leisure activity," Chief Executive Joe Ferraro said in a statement. "Coupled with the significant reduction of vehicles as we right size our fleet to current demand, we anticipate both positive cash flow and adjusted EBITDA for the remainder of 2020," Ferraro said.
-Claudia Assis; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
July 28, 2020 18:15 ET (22:15 GMT)
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