Avis Budget Group (NYSE:CAR) expects to post stronger third-quarter earnings, driven by higher demand for its products and a tighter cap on expenses, though investors still seemed unimpressed as the anticipated results would only match expectations.
Based on preliminary data, the car renter said it expects third-quarter revenue for the period ended Sept. 30 to increase to $1.5 billion.
The Parsippany, New Jersey-based company, which is working with Dollar Thrifty Automotive (NYSE:DTG) to get regulatory approval for a merger, is anticipating EBITDA of $210 million to $220 million.
The results would fall virtually in line with average analyst estimates polled by Thomson Reuters of $1.52 billion revenue and $217 million EBITDA.
An improvement in all of Avis’ operating segments, driven by its domestic car rental segment, are expected to boost earnings, the company said.
“We expected that our third-quarter results will show that vehicle rental demand has begun to strengthen, that our cost-saving initiatives have continues to produce meaningful benefits, and that those two trends have had a significant positive effect on our earnings,” Avis Budget CEO Ronald L. Nelson.
The company is “encouraged” by recent trends in the business and year-over-year improvements, he said.
Avis also plans to report a cash balance as of Sept. 30 of more than $600 million and a corporate debt balance, which is not related to vehicles, of $2.1 billion.
The provider of car rental services plans to release official third-quarter results early next month.