For Immediate Release
Chicago, IL – July 25, 2013 – Today, Zacks Equity Research discusses the U.S. Business Services, including Healthcare Services Group, Inc. -Free Report), Cardtronics, Inc. -Free Report), Avis Budget Group, Inc. -Free Report), Furmanite Corporation -Free Report) and ENGlobal Corporation -Free Report).
Industry: Business Services
With companies starting to release their second quarter financial reports, let’s take a look at how things are shaping up for the sector.
Earnings for the business sector have grown 9.7% in first quarter, faring better than the S&P Group’s earnings growth of 2.4%. Earnings were also better than 8.6% growth achieved in the last quarter of 2012.
Revenues showed an improvement of 2.8%, faring much better than the S&P 500’s year-over-year average of negative 1.1%. Revenue growth also improved sequentially.
In terms of surprises, the sector’s performance was weaker than the broader market, with only 52.6% of Business Services companies beating earnings expectations, compared to the ‘beat ratio’ of 65.2% for the S&P 500.
Looking ahead at the second quarter results, earnings are expected to improve 9.7% compared to a minimal improvement of 1% for the broader market. Revenue growth is expected to be 1.6% for the sector but decline 0.8% for the S&P 500.
Consolidations in Q2
Mergers and acquisitions play an important part in not only strengthening a company’s foothold by grabbing more market share but also edging out competition.
Healthcare Services Group, Inc. -Free Report), provider of housekeeping, laundry, linen, facility maintenance and dietary services to nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States, entered into a deal with Platinum Health Services, LLC to purchase all of its operating assets.
Cardtronics, Inc. -Free Report) is busy making acquisitions. This provider of automated consumer financial services, purchased the assets of Rohnert Park, CA-based Merrimak ATM Group, LLC in June. In May it purchased the assets of Portland, OR-based Aptus Financial.
Global vehicle rental giant Avis Budget Group, Inc. -Free Report) acquired Payless Car Rental, the sixth largest car rental company.
Furmanite Corporation -Free Report), provider of specialized technical services, has also entered into a deal to buy the Gulf coast operations of ENGlobal Corporation -Free Report). These are ENGlobal Corp.’s professional service assets.
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