Avis Budget Group, Inc. CAR reported dismal second-quarter 2026 results.
CAR’s earnings of 98 cents per share missed the Zacks Consensus Estimate of $2.16 by 54.6%. Earnings improved sharply from 10 cents in the year-ago quarter.
Revenues declined 1.3% year over year to $3 billion, missing the consensus estimate of $3.08 billion by 2.8%. Lower rental days weighed on the top line, while disciplined fleet reductions helped lift total vehicle utilization to a second-quarter record of 72.6%.
Avis Budget Group, Inc. Price, Consensus and EPS Surprise
Avis Budget Group, Inc. price-consensus-eps-surprise-chart | Avis Budget Group, Inc. Quote
The lower-than-expected earnings and revenue results dragged the stock down 16.5% since the earnings release on July 28.
CAR’s Fleet Discipline Supports Profitability
Avis Budget generated net income of $63 million compared with $5 million in the prior-year quarter. Net income attributable to the company was $35 million, up from $4 million a year earlier.
Adjusted EBITDA increased 3.2% year over year to $286 million. The improvement came despite lower revenues, reflecting reduced fleet costs, better utilization and tighter expense management.
Avis Budget Sees Rental Volumes Decline
Total rental days fell 2.3% year over year to 43.91 million. The average rental fleet declined 4.9% to 664,638 vehicles as management accelerated vehicle dispositions in response to weakening booking trends.
Revenues per day increased 1% to $68.29. Excluding currency effects, revenues per day were $67.84, up slightly from $67.62 in the year-ago quarter. Management prioritized longer-duration rentals, which carried lower daily rates but offered better transaction economics and reduced handling costs.
CAR’s Americas Segment Delivers Margin Gains
Americas revenues declined 1.9% year over year to $2.29 billion. Rental days decreased 2.1% to 32.60 million, while the average fleet contracted 5.4% to 489,192 vehicles.
Americas adjusted EBITDA rose 7.7% to $237 million. Vehicle utilization improved 2.5 percentage points to a record 73.2%, helping offset lower volumes. Revenue per day, excluding currency effects, inched up to $70.22 from $70.03.
Avis Budget’s International Results Stay Pressured
International revenues were $710 million, nearly flat year over year. Excluding exchange-rate effects, revenues declined 2.5% as rental days fell 2.9% to 11.31 million.
Adjusted EBITDA decreased 11% to $73 million. Management cited weaker commercial demand, lower inbound travel and increased industry fleet supply in several European markets. International revenues per day rose 3.4% as reported, but inched up 0.4% excluding currency effects.
CAR Benefits From Lower Fleet Costs
Vehicle depreciation and lease charges declined 8.3% year over year to $583 million. Total per-unit fleet costs fell 3.6% to $292 per month and decreased 4.3% to $290 excluding currency effects.
Operating expenses remained flat at $1.53 billion. Selling, general and administrative expenses declined 2.8% to $385 million, while vehicle interest expenses increased slightly to $232 million. Corporate interest expenses decreased to $108 million from $110 million.
Avis Budget Advances Liquidity & Deleveraging
CAR ended June with $558 million in cash and cash equivalents. Available liquidity was approximately $1 billion, with an additional $1.9 billion in fleet funding capacity.
During the quarter, the company issued $300 million of senior notes due in 2031 and used the proceeds to reduce notes due in 2027. It also refinanced its $2-billion revolving credit facility, extending the maturity to June 2031. Net corporate leverage stood at 7.4 times, down one turn from the end of 2025.
CAR Reaffirms Its 2026 EBITDA Outlook
Avis Budget reiterated its full-year adjusted EBITDA guidance of $850 million to $1 billion. Management expects to reduce leverage by at least one full turn by the end of 2026.
For the third quarter, the company expects the Americas fleet to remain down by a mid-single-digit percentage. Stronger utilization should partly offset the fleet reduction, while revenues per day are projected to remain roughly flat year over year. Management expects year-over-year adjusted EBITDA growth despite continued pressure on rental volumes.
Avis Budget carries a Zacks Rank #5 (Strong Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
Verisk VRSK reported second-quarter 2026 diluted adjusted earnings of $1.98 per share, beating the Zacks Consensus Estimate of $1.94 by 2.1%. The figure increased 5.3% from the year-ago quarter.
Revenues of $806.3 million topped the consensus mark of $802.4 million by 0.5% and rose 4.3% year over year.
ADP ADP posted fourth-quarter fiscal 2026 adjusted earnings of $2.64 per share, beating the Zacks Consensus Estimate of $2.59 by 1.9%. The metric increased 17% from the year-ago quarter.
Revenues of $5.47 billion surpassed the consensus mark of $5.42 billion by 0.9% and rose 7% year over year.
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