DETROIT (Reuters) - Avis Budget Group Inc (CAR.O) on Monday posted a better-than-expected net profit thanks to strong summer demand, but the car rental company’s shares fell more than 10 percent in after-market trading as it lowered its full-year earnings forecast citing the impact of hurricanes.
The company said it estimated the combined damage of hurricanes Harvey, Irma and Maria had lowered its pre-tax earnings by $15 million in the quarter.
Shares in Avis and rival Hertz Global Holdings Inc (HTZ.N) rose in the wake of the hurricanes as investors expected stronger demand for rental cars as consumers waited to replace damaged vehicles.
Doubts about over-capacity and industry pricing have weighed on the rental car companies’ shares, as have concerns that off-lease cars are flooding the used-car market. The rise of car-sharing companies also make some investors wary.
“As a consequence of the hurricanes, we have updated our full year outlook to reflect the impact of the operational disruption we faced during the quarter,” Chief Executive Officer Larry De Shon said in a statement.
Avis said it now expects full-year earnings per share in a range from $2.45 to $2.65, compared with a previous range of $2.40 to $2.80.
The Parsippany, New Jersey-based company reported a net profit for the third quarter ending Sept. 30 of $245 million or $2.91 per share, up from $209 million or $2.28 a year earlier.
Excluding one-time items the company reported earnings per share of $3.10. On that basis analysts had expected earnings per share of $3.04.
In after-market trading Avis Budget shares were down more than 10 percent from their official close at $37.25.
Reporting By Nick Carey; Editing by Chris Reese and Tom Brown