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Shares of Avis Budget Group, Inc. (NASDAQ: CAR), a provider of car and truck rentals and car-sharing services to businesses and consumers, have shed about 13% of their value Wednesday as of 1:15 p.m. EST after the company's fourth quarter fell short of Wall Street estimates.
Avis' revenue during the fourth quarter checked in at $1.88 billion, missing the $1.96 billion consensus estimate. The company's bottom line also fell $0.02 short of estimates, checking in with adjusted earnings per share of $0.15 during the fourth quarter.
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Much of Avis' financial pain was driven by lower pricing and higher per-unit fleet costs companywide, which wasn't fully offset by the company's international growth. For context, Avis' Americas business segment posted an 8% adjusted EBITDA decline to $101 million, which was partially offset by a 13% international adjusted EBITDA increase to $36 million.Currency exchange also played a factorand had a $7 million adverse impact on the company's adjusted EBITDA compared to what management originally anticipated.
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On the bright side, Avis continues to return some value to shareholders through share repurchases. The company repurchased 2.8 million shares of its stock during the fourth quarter at a cost of $100 million, reducing its shares outstanding by 3%.
Looking forward, Avis expects full-year 2017 revenue to increase by a slight 2% to 3% and per-unit fleet costs to remain about as expensive as 2016. Its full-year adjusted EBITDA is expected to check in between $840 million and $920 million, which would be flat to 10% year-over-year growth compared to 2016.
Ultimately, the company expects to rebound in 2017 after a slightly weaker-than-expected 2016, but in my opinion, it'll likely be during the back half of the year before investors see meaningful bottom-line improvement.
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