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Why Is ABM Industries (ABM) Up 9.6% Since Last Earnings Report?
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It has been about a month since the last earnings report for ABM Industries (ABM - Free Report) . Shares have added about 9.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is ABM Industries due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
ABM Industries Lags Q1 Earnings Estimates, Revenues Miss
ABM Industries reported mixed first-quarter fiscal 2021 results, wherein earnings beat the Zacks Consensus Estimate while revenues missed the same.
Adjusted earnings from continuing operations came in at $1.01 per share, beating the consensus mark by 65.6% and improving more than 100% year over year. The bottom line benefited from higher margin improvement in Work Orders and EnhancedClean services as clients continue to incorporate disinfection into their operations. Persistent management of direct labor to align with the operating environment is also an added positive.
Total revenues of $1.49 billion missed the consensus estimate by 0.5% and declined 7.5% from the year-ago quarter. The year-over-year decline was due to coronavirus-related client disruptions, such as facility access limitations and service-scope changes within the company's Aviation and Technical Solutions segments. These were, however, partially offset by huge demand for disinfection-related work orders and EnhancedClean services in the Business & Industry, and Technology & Manufacturing segments.
Segment-wise Revenues
Business & Industry revenues decreased 1.4% year over year to $809.4 million. Aviation revenues decreased 40% year over year to $143.1 million. Technical Solutions revenues decreased 20.2% year over year to $113.4 million.
Technology & Manufacturing revenues improved 6.5% year over year to $249.2 million. Education revenues of $209.4 million increased 0.7% from the prior-year quarter.
Operating Results
Adjusted EBITDA came in at $123.7 million, up 79.9% from the prior-year quarter. Adjusted EBITDA margin rose to 8.3% from 4.3% in the year-ago quarter.
Adjusted income from continuing operations was $68.3 million, up more than 100% year over year. Operating expenses decreased 12.9% from the year-ago quarter to $1.25 billion. Selling, general and administrative expenses increased 4.2% from the year-ago quarter to $122.6 million.
Balance Sheet & Cash Flow
ABM Industries exited first-quarter fiscal 2021 with cash and cash equivalents of $378.3 million compared with $394.2 million at the end of the prior quarter. Long-term debt was $573.8 million compared with $603 million at the end of the prior quarter.
Net cash generated from operating activities totaled $45.3 million in the reported quarter. Free-cash flow came in at $38.7 million.
Dividend Payout
ABM Industries paid out a quarterly cash dividend of 19 cents per share, leading to $12.7 million of total dividend payout in the reported quarter. Additionally, the company’s board of directors announced a quarterly cash dividend of 19 cents, payable on May 3, 2021, to its shareholders of record as of Apr 1, 2021. This marked the 220th consecutive quarterly cash dividend declared by the company.
Fiscal 2021 Guidance
For fiscal 2021, ABM Industries expects adjusted income from continuing operations in the range of $3.00 - $3.25 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 29.94% due to these changes.
VGM Scores
Currently, ABM Industries has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise ABM Industries has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is ABM Industries (ABM) Up 9.6% Since Last Earnings Report?
It has been about a month since the last earnings report for ABM Industries (ABM - Free Report) . Shares have added about 9.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is ABM Industries due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
ABM Industries Lags Q1 Earnings Estimates, Revenues Miss
ABM Industries reported mixed first-quarter fiscal 2021 results, wherein earnings beat the Zacks Consensus Estimate while revenues missed the same.
Adjusted earnings from continuing operations came in at $1.01 per share, beating the consensus mark by 65.6% and improving more than 100% year over year. The bottom line benefited from higher margin improvement in Work Orders and EnhancedClean services as clients continue to incorporate disinfection into their operations. Persistent management of direct labor to align with the operating environment is also an added positive.
Total revenues of $1.49 billion missed the consensus estimate by 0.5% and declined 7.5% from the year-ago quarter. The year-over-year decline was due to coronavirus-related client disruptions, such as facility access limitations and service-scope changes within the company's Aviation and Technical Solutions segments. These were, however, partially offset by huge demand for disinfection-related work orders and EnhancedClean services in the Business & Industry, and Technology & Manufacturing segments.
Segment-wise Revenues
Business & Industry revenues decreased 1.4% year over year to $809.4 million. Aviation revenues decreased 40% year over year to $143.1 million. Technical Solutions revenues decreased 20.2% year over year to $113.4 million.
Technology & Manufacturing revenues improved 6.5% year over year to $249.2 million. Education revenues of $209.4 million increased 0.7% from the prior-year quarter.
Operating Results
Adjusted EBITDA came in at $123.7 million, up 79.9% from the prior-year quarter. Adjusted EBITDA margin rose to 8.3% from 4.3% in the year-ago quarter.
Adjusted income from continuing operations was $68.3 million, up more than 100% year over year. Operating expenses decreased 12.9% from the year-ago quarter to $1.25 billion. Selling, general and administrative expenses increased 4.2% from the year-ago quarter to $122.6 million.
Balance Sheet & Cash Flow
ABM Industries exited first-quarter fiscal 2021 with cash and cash equivalents of $378.3 million compared with $394.2 million at the end of the prior quarter. Long-term debt was $573.8 million compared with $603 million at the end of the prior quarter.
Net cash generated from operating activities totaled $45.3 million in the reported quarter. Free-cash flow came in at $38.7 million.
Dividend Payout
ABM Industries paid out a quarterly cash dividend of 19 cents per share, leading to $12.7 million of total dividend payout in the reported quarter. Additionally, the company’s board of directors announced a quarterly cash dividend of 19 cents, payable on May 3, 2021, to its shareholders of record as of Apr 1, 2021. This marked the 220th consecutive quarterly cash dividend declared by the company.
Fiscal 2021 Guidance
For fiscal 2021, ABM Industries expects adjusted income from continuing operations in the range of $3.00 - $3.25 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 29.94% due to these changes.
VGM Scores
Currently, ABM Industries has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise ABM Industries has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.