NEW YORK - (AP) - Avis Budget Group Inc. (CAR) on Tuesday posted a $1.01 billion loss for the third quarter as the car rental company incurred substantial charges related to the breakup of its parent, the former conglomerate Cendant.
The Parsippany, N.J.-based company posted a loss of $10.07 per share for the three months ended Sept. 30 compared with year-ago earnings of $499 million, or $4.72 per share. The loss from continuing operations totaled $325 million versus earnings of $3 million a year earlier.
Revenue rose to $1.57 billion from $1.55 billion a year ago. During the quarter, domestic car rental revenue rose 2 percent to $1.19 billion, while international car rental revenue jumped 16 percent to $222 million. A 17 percent decline in revenue from its truck rental segment partially offset the gains.
Total expenses increased by 32 percent to $2.03 billion largely due to the $480 million cost of breaking up its conglomerate businesses. Earlier this year, Cendant spun off realtor group Realogy Corp. (H), hotel operator Wyndham Worldwide Corp. (WYN) and travel business Travelport. Its primary operation became Avis.
On Aug. 29, stockholders voted to change the company's name from Cendant Corp. to Avis Budget Group.
Earlier this month, Avis posted a preliminary pretax loss of $461 million for the third quarter, compared with $8 million a year ago.
The quarterly report includes a restatement of past results to correct errors in accounting for the purchase of Avis Group Holdings Inc. in 2001, including changes in goodwill for the years 2001 through 2004 and the first quarter of 2005. The restatement resulted in a $51 million increase to earnings as of December 2005.
Also, Avis restated results in the second quarter of 2006 to recognize an additional $300 million loss on the sale of Travelport.
Avis shares slipped 8 cents to $20.62 in morning trading on the New York Stock Exchange.
MOLINE, Ill. - Higher prices for farm and lawn-care equipment helped lift Deere & Co.'s (DE) fiscal fourth-quarter profit by 19 percent. Its stock jumped 5 percent to a new high for the year, even as the company warned of a sales slowdown over the next year.
Deere chairman and chief executive officer Robert W. Lane said the company's efforts to control costs and inventories also boosted earnings at a time when sales were flat.
Analysts questioned whether Deere's outlook was too conservative during a conference call with company officials. With high crop prices and ethanol boosting demand for corn, analysts said farm income could rise next year and boost equipment sales.
Deere officials agreed the outlook for farm income is encouraging, but said farmers won't realize the impact of higher crop prices until later next year. They also said uncertainty over a new U.S. farm bill and high levels of used farm equipment on the market will hold back sales.
Earnings for the quarter that ended Oct. 31 increased to $277.3 million, or $1.20 per share, from $232.8 million, or 96 cents per share during for the same period last year.
Moline-based Deere's profits easily topped the estimate of 94 cents a share by analysts polled by Thomson Financial.
"We are particularly encouraged that the company achieved record net income for the year and strong cash flow in the face of market conditions that have been relatively weak in many parts of the world," Lane said in a statement.
Revenue grew 3 percent to $5.12 billion from $4.99 billion during the same period a year ago. Analysts expected revenue of $4.79 billion.
Deere shares rose more than 5 percent to $93.93 in morning trading on the New York Stock Exchange, its highest level this year. Shares have traded in a 52-week range of $62.65 to $91.98.
The company said sales of its trademark green-and-yellow farm equipment and its commercial products each dipped 1 percent for the quarter, while sales of construction and forestry machines rose 3 percent. But improved pricing and lower warranty expenses helped drive profit across its divisions.
For the full fiscal year, Deere earnings rose to $1.69 billion, or $7.18 per share, from $1.45 billion, or $5.87 per share during the same period last year. Revenue advanced 5 percent to $22.15 billion from $21.19 billion a year ago.
The company said it expects to earn between $150 million and $175 million in the first quarter of fiscal year 2007 and about $1.33 billion for the entire year.
The company said it anticipates a slowdown in sales due to declines in construction and forestry production in the U.S. and Canada. Deere projects a 5 percent decline in construction equipment sales for the year.
Deere forecasts a 4 percent increase in worldwide farm equipment sales, spurred in part by growth of ethanol and other renewable fuels. But the company projects flat sales in the U.S. and Canada, citing uncertainty over U.S. farm legislation and whether recent crop price gains will hold.
Sales of Deere's commercial and consumer products are expected to rise 4 percent as growing landscaping operations offset a softer market for residential housing.
Along with John Deere tractors and other farm machinery, the company makes construction equipment and consumer products that include mowers, chain saws and snow blowers.