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Why Is ABM Industries (ABM) Up 1% 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 1% 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 drivers.
ABM Industries reported solid third-quarter fiscal 2021 results, with earnings and revenues beating the Zacks Consensus Estimate.
Adjusted earnings from continuing operations came in at 90 cents per share, beating the consensus mark by 12.5% and increasing 20% year over year. The bottom line benefited from higher revenues, favorable mix, labor efficiencies and lower interest expenses. Increase in higher margin virus protection services as well as efficient management of direct labor and lower bad debt expense acted as additional positives. These were, however, partially offset by rise in corporate expenses (due to planned investments in information technology and higher personnel costs).
Total revenues of $1.54 billion beat the consensus estimate by 0.7% and rose 10.7% from the year-ago quarter’s levels. The upside was backed by strength across each of the business segments, which reported solid year-over-year growth.
Quarterly results were backed by continued broad-based demand for the company’s services and efficient execution within an improving business environment. The company also witnessed solid demand for the virus protection services.
Segment-wise Revenues
Business & Industry revenues increased 6.7% year over year to $807.7 million. Technology & Manufacturing revenues inched up 1.2% year over year to $246.1 million. Education revenues of $208.4 million increased 10.5% from the prior-year quarter’s tallies. Aviation revenues increased 51% year over year to $175.7 million. Technical Solutions revenues increased 22.7% year over year to $146.1 million.
Operating Results
Adjusted EBITDA came in at $113.5 million, up 3.5% from the prior-year quarter’s levels. Adjusted EBITDA margin fell to 7.4% from 7.9% in the year-ago quarter.
Operating expenses increased 9.6% from the year-ago quarter’s figure to $1.29 billion. Selling, general and administrative expenses increased more than 100% from the year-ago quarter’s levels to $253.8 million.
Balance Sheet & Cash Flow
ABM Industries exited third-quarter fiscal 2021 with cash and cash equivalents of $505.4 million compared with $435.7 million at the end of the prior quarter. Long-term debt was $623.8 million compared with $524.2 million at the end of the prior quarter.
Net cash generated from operating activities totaled $87.6 million in the reported quarter. Free cash flow came in at $79.2 million.
Dividend Payout
ABM Industries paid out a quarterly cash dividend of 19 cents per share, leading to a $12.8-million total dividend payout in the reported quarter. The company’s board of directors announced a quarterly cash dividend of 19 cents, payable on Nov 1, 2021, to its shareholders of record as of Oct 7, 2021. This marked the 222nd consecutive quarterly cash dividend declared by the company.
Fiscal 2021 Guidance
For fiscal 2021, ABM Industries raised its guidance for adjusted income from continuing operations to the range of $3.45-$3.55 per share from the prior guidance of $3.30-$3.50.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, ABM Industries has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, ABM Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is ABM Industries (ABM) Up 1% 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 1% 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 drivers.
ABM Industries Surpasses Q3 Earnings & Revenues Estimates
ABM Industries reported solid third-quarter fiscal 2021 results, with earnings and revenues beating the Zacks Consensus Estimate.
Adjusted earnings from continuing operations came in at 90 cents per share, beating the consensus mark by 12.5% and increasing 20% year over year. The bottom line benefited from higher revenues, favorable mix, labor efficiencies and lower interest expenses. Increase in higher margin virus protection services as well as efficient management of direct labor and lower bad debt expense acted as additional positives. These were, however, partially offset by rise in corporate expenses (due to planned investments in information technology and higher personnel costs).
Total revenues of $1.54 billion beat the consensus estimate by 0.7% and rose 10.7% from the year-ago quarter’s levels. The upside was backed by strength across each of the business segments, which reported solid year-over-year growth.
Quarterly results were backed by continued broad-based demand for the company’s services and efficient execution within an improving business environment. The company also witnessed solid demand for the virus protection services.
Segment-wise Revenues
Business & Industry revenues increased 6.7% year over year to $807.7 million. Technology & Manufacturing revenues inched up 1.2% year over year to $246.1 million. Education revenues of $208.4 million increased 10.5% from the prior-year quarter’s tallies. Aviation revenues increased 51% year over year to $175.7 million. Technical Solutions revenues increased 22.7% year over year to $146.1 million.
Operating Results
Adjusted EBITDA came in at $113.5 million, up 3.5% from the prior-year quarter’s levels. Adjusted EBITDA margin fell to 7.4% from 7.9% in the year-ago quarter.
Operating expenses increased 9.6% from the year-ago quarter’s figure to $1.29 billion. Selling, general and administrative expenses increased more than 100% from the year-ago quarter’s levels to $253.8 million.
Balance Sheet & Cash Flow
ABM Industries exited third-quarter fiscal 2021 with cash and cash equivalents of $505.4 million compared with $435.7 million at the end of the prior quarter. Long-term debt was $623.8 million compared with $524.2 million at the end of the prior quarter.
Net cash generated from operating activities totaled $87.6 million in the reported quarter. Free cash flow came in at $79.2 million.
Dividend Payout
ABM Industries paid out a quarterly cash dividend of 19 cents per share, leading to a $12.8-million total dividend payout in the reported quarter. The company’s board of directors announced a quarterly cash dividend of 19 cents, payable on Nov 1, 2021, to its shareholders of record as of Oct 7, 2021. This marked the 222nd consecutive quarterly cash dividend declared by the company.
Fiscal 2021 Guidance
For fiscal 2021, ABM Industries raised its guidance for adjusted income from continuing operations to the range of $3.45-$3.55 per share from the prior guidance of $3.30-$3.50.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, ABM Industries has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, ABM Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.