Avis Budget Group Inc. investors were having their worst day in four years on Tuesday, after the car-rental company said it sold a record number of vehicles during the fourth quarter in a bad market for used cars, due to vehicle oversupply and a spike in interest costs. Meanwhile, the company reported fourth-quarter profit that was well above expectations, despite a surprise decline in revenue.
“Currently, there is a considerable amount of volatility in the used-car market,” said Chief Financial Officer Izzy Martins, according to an AlphaSense transcript of the company’s post-earnings call with analysts. “However, we believe that it is prudent for our operations and healthy for the overall industry to exit vehicles despite the used-car-market conditions.” Avis’s stock
CAR,
-23.05%
plunged 22.7% in afternoon trading, to put it on track for the lowest close since Oct. 7, 2021. It was also headed for the biggest one-day percentage loss since it plummeted 36% on March 18, 2020, at the start of the COVID-19 pandemic. The stock’s price decline of $38.15 shaved about 233 points off the Dow Jones Transportation Average
DJT,
which tumbled 474 points, or 2.9%. One reason the company sold a record number of vehicles was that it believed the used-car market was “normalizing” and it wanted …
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“Currently, there is a considerable amount of volatility in the used-car market,” said Chief Financial Officer Izzy Martins, according to an AlphaSense transcript of the company’s post-earnings call with analysts. “However, we believe that it is prudent for our operations and healthy for the overall industry to exit vehicles despite the used-car-market conditions.” Avis’s stock
CAR,
-23.05%
plunged 22.7% in afternoon trading, to put it on track for the lowest close since Oct. 7, 2021. It was also headed for the biggest one-day percentage loss since it plummeted 36% on March 18, 2020, at the start of the COVID-19 pandemic. The stock’s price decline of $38.15 shaved about 233 points off the Dow Jones Transportation Average
DJT,
which tumbled 474 points, or 2.9%. One reason the company sold a record number of vehicles was that it believed the used-car market was “normalizing” and it wanted …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]