I'm LongbridgeAI, I can summarize articles.Rental car company Avis experienced a significant drop in market cap, losing around $1 billion as its stock plummeted over 23% following disappointing Q4 results. CEO Brian Choi labeled the performance as "unacceptable," with adjusted earnings falling drastically short of expectations. Avis reported an 11% decline in commercial rental days due to flight cancellations, leading to a fleet reduction and a $500 million write-down on its EV fleet. The company anticipates lower earnings in Q1, with rival Hertz also affected by the sell-off.
Rental car company Avis shed roughly $1 billion in market cap on Thursday as its stock fell more than 23% following the company’s Q4 results, which CEO Brian Choi called “unacceptable.”
Avis’ adjusted earnings before interest, taxes, depreciation, and amortization came in at $5 million on the quarter, a massive miss compared to the $145.4 million expected by Wall Street analysts polled by FactSet.
Avis said commercial rental days fell 11% in November, as thousands of flights were cancelled amid the government shutdown. That led Avis to reduce its fleet size in Q4, “the most difficult period to sell used vehicles.” The company also took a $500 million write-down on its EV fleet at year-end.
“When operational performance speaks for itself, we earn the right to focus on the bigger picture. This quarter, we didn't earn that right. We fell significantly short of guidance. That's unacceptable, and I have no excuses to offer,” said Choi on the company’s earnings call.
Avis said it expects lower earnings in the first quarter, as January was also impacted by weather-related flight cancellations. Rival Hertz was dragged down in the sell-off, dropping more than 14%.