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ABM Industries (ABM) Q3 Earnings Top Estimates, Revenues Lag
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ABM Industries Inc.(ABM - Free Report) reported mixed third-quarter fiscal 2020 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings from continuing operations came in at 75 cents per share, which outpaced the consensus mark by 87.5% and the year-ago quarter’s reported figure by 25%. The bottom line benefited from higher margin improvement in Work Orders and persistent management of direct labor to align with the operating environment. Additionally, during the reported quarter, the company enacted various temporary cost-cutting measures such as salary reductions and furlough actions (concluded on Aug 1, 2020), which offset other expenses such as investments in the company’s new EnhancedClean program.
Total revenues of $1.39 billion missed the consensus estimate by 2.6% and declined 15.4% from the year-ago quarter. The year-over-year decline was due to coronavirus-related client disruptions, such as facility closures and service-scope changes within the majority of its business segments. These were, however, partially offset by huge demand for COVID-19-related work orders in the Business & Industry and Technology & Manufacturing segments.
Revenues by Segment
Business & Industry revenues (54% of total revenues) decreased 6.3% year over year to $756.9 million. Aviation revenues (8%) decreased 55.8% year over year to $116.4 million. Education revenues (14%) of $188.6 million decreased 12.5% from the prior-year quarter. Technical Solutions revenues (9%) decreased 28.1% year over year to $119.2 million.
Technology & Manufacturing revenues (17%) improved 7.2% year over year to $243.2 million.
Operating Results
Adjusted EBITDA came in at $109.7 million compared with $93 million in the prior-year quarter. Also, adjusted EBITDA margin rose to 7.9% from 5.6% in the year-ago quarter.
Adjusted income from continuing operations was $50.1 million, up 24.6% year over year. Operating expenses decreased 19.2% from the year-ago quarter to $1.17 billion. Selling, general and administrative expenses decreased 5% from the year-ago quarter to $113.7 million.
ABM Industries Incorporated Price, Consensus and EPS Surprise
ABM Industries exited third-quarter fiscal 2020 with cash and cash equivalents of $229.4 million compared with $555.9 million at the end of the prior quarter. Long-term debt was $664.2 million compared with $1.11 billion at the end of the prior quarter.
Net cash generated from operating activities totaled $130.9 million in the reported quarter. Free-cash flow came in at $121.1 million.
Dividend Payout
ABM Industries paid out a quarterly cash dividend of 18.5 cents per share, leading to $12.3 million of total dividend payout in the reported quarter. Additionally, the company’s board of directors announced a cash dividend of 18.5 cents per share, to be paid out on Nov 2, 2020, to its shareholders of record as of Oct 1. This marked the 218th consecutive quarterly cash dividend declared by the company.
Fiscal 2020 Guidance
Due to the coronavirus-induced uncertainties in the market, ABM Industries did not provide fiscal 2020 guidance.
Currently, ABM Industries carries a Zacks Rank #4 (Sell).
Equifax (EFX - Free Report) reported second-quarter 2020 adjusted earnings of $1.60 per share, which beat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis. Revenues of $982.8 million outpaced the consensus estimate by 6.4% and improved 12% year over year.
TransUnion (TRU - Free Report) reported second-quarter 2020 adjusted earnings of 66 cents per share that outpaced the consensus mark by 34.7% but declined 4.3% year over year. Total revenues of $634 million beat the consensus mark by 6.2% but decreased 4% year over year.
Rollins, Inc. (ROL - Free Report) reported second-quarter 2020 adjusted earnings of 23 cents per share, beating the consensus mark by 35.3% and increasing 9.5% year over year. Revenues of $553.3 million beat the consensus mark by 2.2% and improved 5.6% year over year.
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With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
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ABM Industries (ABM) Q3 Earnings Top Estimates, Revenues Lag
ABM Industries Inc.(ABM - Free Report) reported mixed third-quarter fiscal 2020 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings from continuing operations came in at 75 cents per share, which outpaced the consensus mark by 87.5% and the year-ago quarter’s reported figure by 25%. The bottom line benefited from higher margin improvement in Work Orders and persistent management of direct labor to align with the operating environment. Additionally, during the reported quarter, the company enacted various temporary cost-cutting measures such as salary reductions and furlough actions (concluded on Aug 1, 2020), which offset other expenses such as investments in the company’s new EnhancedClean program.
Total revenues of $1.39 billion missed the consensus estimate by 2.6% and declined 15.4% from the year-ago quarter. The year-over-year decline was due to coronavirus-related client disruptions, such as facility closures and service-scope changes within the majority of its business segments. These were, however, partially offset by huge demand for COVID-19-related work orders in the Business & Industry and Technology & Manufacturing segments.
Revenues by Segment
Business & Industry revenues (54% of total revenues) decreased 6.3% year over year to $756.9 million. Aviation revenues (8%) decreased 55.8% year over year to $116.4 million. Education revenues (14%) of $188.6 million decreased 12.5% from the prior-year quarter. Technical Solutions revenues (9%) decreased 28.1% year over year to $119.2 million.
Technology & Manufacturing revenues (17%) improved 7.2% year over year to $243.2 million.
Operating Results
Adjusted EBITDA came in at $109.7 million compared with $93 million in the prior-year quarter. Also, adjusted EBITDA margin rose to 7.9% from 5.6% in the year-ago quarter.
Adjusted income from continuing operations was $50.1 million, up 24.6% year over year. Operating expenses decreased 19.2% from the year-ago quarter to $1.17 billion. Selling, general and administrative expenses decreased 5% from the year-ago quarter to $113.7 million.
ABM Industries Incorporated Price, Consensus and EPS Surprise
ABM Industries Incorporated price-consensus-eps-surprise-chart | ABM Industries Incorporated Quote
Balance Sheet & Cash Flow
ABM Industries exited third-quarter fiscal 2020 with cash and cash equivalents of $229.4 million compared with $555.9 million at the end of the prior quarter. Long-term debt was $664.2 million compared with $1.11 billion at the end of the prior quarter.
Net cash generated from operating activities totaled $130.9 million in the reported quarter. Free-cash flow came in at $121.1 million.
Dividend Payout
ABM Industries paid out a quarterly cash dividend of 18.5 cents per share, leading to $12.3 million of total dividend payout in the reported quarter. Additionally, the company’s board of directors announced a cash dividend of 18.5 cents per share, to be paid out on Nov 2, 2020, to its shareholders of record as of Oct 1. This marked the 218th consecutive quarterly cash dividend declared by the company.
Fiscal 2020 Guidance
Due to the coronavirus-induced uncertainties in the market, ABM Industries did not provide fiscal 2020 guidance.
Currently, ABM Industries carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some other Services Companies
Equifax (EFX - Free Report) reported second-quarter 2020 adjusted earnings of $1.60 per share, which beat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis. Revenues of $982.8 million outpaced the consensus estimate by 6.4% and improved 12% year over year.
TransUnion (TRU - Free Report) reported second-quarter 2020 adjusted earnings of 66 cents per share that outpaced the consensus mark by 34.7% but declined 4.3% year over year. Total revenues of $634 million beat the consensus mark by 6.2% but decreased 4% year over year.
Rollins, Inc. (ROL - Free Report) reported second-quarter 2020 adjusted earnings of 23 cents per share, beating the consensus mark by 35.3% and increasing 9.5% year over year. Revenues of $553.3 million beat the consensus mark by 2.2% and improved 5.6% year over year.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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