Avis Budget reports massive earnings beat in Q1, stock jumps
Yahoo Finance Live anchors discuss first quarter earnings for Avis Budget.
Video Transcript
- And this was a big upside surprise-- a big, big, big upside surprise. Avis Budget is what I'm talking about. The car rental company coming out with earnings per share of $9.99. Now, just, let's sit on this for a minute. $9.99. The estimate was $3.26.
- That's the cost of bleach over at Clorox.
- $9.99 versus $3.26. Something is very strange here. And analysts are-- you know, obviously, it's a big upside surprise. It's helping the shares. But there's a lot of questions this morning about what happened here. How did they have such a big number? Now, the CEO is saying in a statement, despite the impact of Omicron in the first half of the quarter, our team was able to quickly pivot to manage the increasing demand in the back half of the quarter-- diligent fleet management, continued cost optimization. But still, we've got a lot of analysts this morning that are saying, what happened here?
- Right. It can't just all be weekend warriors. And of course, as we're thinking about the return of corporate travel, not so many of those corporate travelers, perhaps, are looking to the vehicle option specifically at the end. But if they are, they are competing at a higher cost now than pre-pandemic for-- and against some of the leisure travelers out there. Ended the quarter with revenue 77% above that first quarter of 2021, at $2.4 billion.
And I think, for here, Avis Budget, what we've seen from Hertz as well, it's really going to look across some of the inventory that they do have, and that fleet management, which they also have talked about in this quarter.
- Right on. And all these quarters were telegraphed. Did you look at the market action we've been talking about, the return to travel? Hilton pretty good. I know it's not getting a lot of love this morning here, but good quarter from them. Marriott's stock has been on the rise the past month. We talked to Hertz's new CEO, Stephen Scherr, a couple of weeks ago. He said demand was looking strong. And realistically, when you see Hertz putting Tom Brady in a commercial, you don't do that if you're not making a lot of money and have a strong outlook for the back half.
- And just one quick thing here. Adam Jonas over at Morgan Stanley--
- Friend of the show.
- --closely-watched autos analysts-- he said in a note, the extraordinary and unsustainable strength of the first quarter, plus announced buybacks-- the company also announced buybacks-- provide an excellent opportunity for investors to return their rental car stock to the company and wait for a better time to get in again. Which I thought was interesting. They're doing buybacks fine. Buy back my shares, Avis. I'll get it another time. That's what Adam Jonas is saying.
