Investing.com -- Shares in Avis Budget Group Inc (NASDAQ:CAR) ticked up in after-hours trading despite of tumbling profits last quarter, as the rental car giant finished with strong revenues and increased its adjusted per-share earnings forecasts for the remainder of 2016 on Tuesday.
During Avis' second quarter of 2016, the company saw its sales surge by 3% to $2.2 billion, amid a spike in rental days and company-wide rental volume. Concurrently, Avis' net profits plummeted 74% to $36 million or 0.38 per share due primarily to soaring expenses. While Avis bolstered sales due to increased prices in its Americas' segment, the gains were offset by higher per-unit fleet costs for the period.
"Our second quarter results reflect a significant improvement in our pricing in the Americas as well as volume growth throughout the world," said Larry De Shon, Avis Budget Group Chief Executive Officer.
Notably, Avis increased its annual Adjusted EBITDA forecasts from $850 to $900 million and its adjusted earnings per share forecasts to a range between 2.90 to 3.30 following Tuesday's results. The company forecasts a brighter outlook in the coming months with expectations for pricing in its Americas division to level off and the negative impacts from foreign exchange translation to wane.
"The third quarter has started on a positive note, with pricing in the Americas increasing year-over-year, while our worldwide fleet costs remain within our expectations. In addition, we recently launched Avis Now, giving customers total control of their rental car experience through our mobile app, including choice of vehicle at the time of rental," De Shon added.
Avis shares gained 0.54 or 1.55% to 35.30 in after-hours.