DOW JONES NEWSWIRES 
 

Avis Budget Group Inc.'s (CAR) fourth-quarter net loss narrowed amid the prior year's $1.2 billion goodwill write-down as car rentals continued to weaken as 2008 came to a close.

Chairman and Chief Executive Ronald Nelson said, "The company faced an unprecedented set of challenging conditions in the fourth quarter, as both leisure and commercial volumes declined significantly, the value of used vehicles dropped precipitously, and both contributed to sharply lower year-over-year pricing."

Avis said in December it would cut 2,200 positions, or about 7% of its work force, as it takes steps to reduce annual costs by $150 million to $200 million by the middle of 2009.

Stagnant credit markets, slumping demand for travel and the automobile industry's hardships are hobbling rental-car companies. Fewer travelers are renting cars, and the industry is struggling to find buyers for used automobiles and to secure financing in order to purchase new ones to replace them.

As a result, Avis, rival Hertz Global Holdings Inc. (HTZ) and other companies are lobbying Congress to allow them to use Troubled Asset Relief Program funds to finance new auto purchases.

For the fourth quarter, Avis' net loss narrowed to $121 million, or $1.20 a share, from $1.06 billion, or $10.16 a share. Net revenue fell 9% to $1.26 billion amid a 6% decline in both mileage per day and rental days and time.

Analysts polled by Thomson Reuters projected a loss of 47 cents on $1.26 billion in revenue.

Avis said 2009 results will be affected by increases in interest expenses tied to its recent refinancing. The company in December announced lender commitments to extend $2.45 billion in credit lines until late 2009, erasing investor concerns that a deal might not be reached amid the constrained credit markets.

Shares of the industry giant, which said operating conditions will be weak for at least the first half of 2009, were unchanged at 50 cents in after-hours trading as revenue met analysts' expectations. The stock through Wednesday was down 28% this month and is off more than 90% since September.

Competitor Hertz on Tuesday swung to a $1.21 billion quarterly loss on write-downs as it too experienced declines in volume, pricing and residual value.

-By Lauren Pollock, Dow Jones Newswires; 201-938-5964; lauren.pollock@dowjones.com