Avis Budget (CAR) Stock Falls on Earnings Miss

Avis Budget (CAR) shares are lower after the company missed analysts' estimates for earnings in the third quarter.
By Lindsay Ingram ,

NEW YORK (TheStreet) -- Shares of Avis Budget Group (CAR) - Get Report were falling 14.7% to $44.63 on Tuesday after the car rental company missed analysts' estimates for earnings in the third quarter.

On Monday, Avis reported earnings of $1.98 a share for the third quarter, below analysts' estimates of $2.02 a share for the quarter. Revenue grew 1.6% year over year to $2.58 billion for the quarter, compared to analysts' estimates of $2.6 billion.

"Revenues and earnings grew year-over-year despite significant exchange-rate headwinds," Chairman and CEO Ronald L. Nelson said in a statement. "Our growth reflected strong summer demand across Europe, lower per-unit fleet costs and benefits from our acquisitions."

The company said it now expected earnings of $3.10 to $3.25 a share for full year 2015, down from its previous estimate of $3.15 to $3.45 a share for the year. Analysts expect Avis to report earnings of $3.36 a share for the year.

Avis also lowered its 2015 revenue growth forecast to 1% from a range of 1% to 3%.

About 5 million shares of Avis were traded by 10:45 a.m. Tuesday, above the company's average trading volume of about 2.3 million shares a day.

TheStreet Ratings team rates AVIS BUDGET GROUP INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

We rate AVIS BUDGET GROUP INC (CAR) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

You can view the full analysis from the report here: CAR

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