Avis Budget Group Second Quarter Earnings Sneak Peek

Avis Budget Group (NASDAQ:CAR) will unveil its latest earnings on Wednesday, August 1, 2012. Avis Budget Group provides car and truck rentals and ancillary services to businesses and consumers in the United States and internationally.

Avis Budget Group Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 70 cents per share, a rise of 11.1% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 44 cents. Between one and three months ago, the average estimate moved up. It has dropped from 71 cents during the last month. Analysts are projecting profit to rise by 49.1% compared to last year’s $2.46.

Last quarter, the company came in at net income of 12 cents per share against a mean estimate of a loss of 7 cents per share, beating estimates after missing them in the previous quarter. In the fourth quarter of the last fiscal year, it missed forecasts by 20 cents.

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A Look Back: In the first quarter, the company swung to a loss of $23 million (22 cents a share) from a profit of $7 million (6 cents) a year earlier, but beat analyst expectations. Revenue rose 31.4% to $1.62 billion from $1.24 billion.

Wall St. Revenue Expectations: Analysts are projecting a rise of 35.5% in revenue from the year-earlier quarter to $1.91 billion.

Stock Price Performance: Between May 1, 2012 and July 26, 2012, the stock price fell $2.34 (-14.9%), from $15.67 to $13.33. The stock price saw one of its best stretches over the last year between April 23, 2012 and May 2, 2012, when shares rose for eight straight days, increasing 39.3% (+$4.75) over that span. It saw one of its worst periods between November 15, 2011 and November 25, 2011 when shares fell for eight straight days, dropping 18% (-$2.47) over that span.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 9.1% in the second quarter of the last fiscal year, 7.3% in the third quarter of the last fiscal year and 33% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.03 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.05 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased 13.6% to $1.67 billion while assets rose 11.7% to $1.72 billion.

Analyst Ratings: With four analysts rating the stock a buy, none rating it a sell and one rating the stock a hold, there are indications of a bullish stance by analysts.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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