Avis expects slightly higher 3rd-qtr revenue, jump in adjusted earnings on better demand

Thursday, October 7, 2010

Avis expects slightly higher 3Q revenue

NEW YORK — Avis Budget Group Inc. said Thursday it expects its third-quarter revenue to increase to about $1.5 billion, up slightly from $1.47 billion a year earlier.

The Parsippany, N.J., car rental company, which is still pursuing a deal to acquire rival Dollar Thrifty, also said it sees earnings before interest, taxes, depreciation, and amortization rising to between $210 million and $220 million from $165 million a year earlier.

Analysts polled by Thomson Reuters expect revenue of $1.52 billion and earnings before interest, taxes, depreciation, and amortization of $217 million.

Avis attributes the higher revenue forecast to an increase in rental days, partially offset by time and mileage per day.

“We expect that our third quarter results will show that vehicle rental demand has begun to strengthen, that our cost-saving initiatives have continued to produce meaningful benefits, and that those two trends have had a significant positive effect on our earnings,” said Chairman and CEO Ronald L. Nelson.

Avis Budget Group Inc. plans to announce its third-quarter results in early November.

Avis has offered $53 per share in cash and stock for Dollar Thrifty Automotive Group, based in Tulsa, Okla. Last month, Avis increased its offer from $40.75 as bidding with rival Hertz Global Holdings Inc. escalated. Avis’ latest bid include $45.79 per share in cash and 0.6543 shares of Avis for each share of Dollar Thrifty.

Dollar Thrifty has asked Avis not to formally make the offer so that the two companies can work with antitrust authorities. Avis has agreed to wait.

Dollar Thrifty’s stockholders turned down a $50.88 a share bid from Hertz last week, which included $43.60 in cash and 0.6366 shares of common stock for each Dollar Thrifty share.

Including restricted stock and stock options and cash, the Hertz offer was worth about $1.56 billion.

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