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ABM Industries (ABM) Beats Q4 Earnings & Revenue Estimates

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ABM Industries Inc. (ABM - Free Report)  reported solid fourth-quarter fiscal 2021 results, with earnings and revenues beating the Zacks Consensus Estimate.

Adjusted earnings from continuing operations came in at 85 cents per share, beating the consensus mark by 6.3% and increasing 23.2% year over year. The bottom line benefited from greater customer demand for higher-margin COVID-related work orders, efficient management of direct labor, especially in Business & Industry and Aviation, and a favorable mix of business in Aviation and Technical Solutions. These, however, were partially offset by a decline in operating profit in the Education segment.

Total revenues of $1.69 billion beat the consensus estimate by 4.7% and rose 14.2% from the year-ago level. The upside was backed by strength across Aviation, Technical Solutions, and Business & Industry business segments.

Quarterly results benefitted from improving business conditions, continued demand for the company’s higher-margin virus protection services, efficient labor management, and strategic M&A.

So far this year, shares of ABM Industries have gained 21.4% compared with the 14.3% decline of the industry it belongs to.

Zacks Investment ResearchImage Source: Zacks Investment Research

Let’s check out the numbers.

Segment-Wise Revenues

Business & Industry revenues increased 17.5% year over year to $933.2 million. Technology & Manufacturing revenues inched up 0.1% year over year to $245.5 million. Aviation revenues increased 43% year over year to $201.7 million. Technical Solutions revenues increased 21% year over year to $149 million.  

Education revenues of $204.4 million, however, decreased 3.7% from the prior-year quarter.

Operating Results

Adjusted EBITDA came in at $111.2 million, up 20.2% from the prior-year level. Adjusted EBITDA margin rose to 6.6% from 6.2% in the year-ago quarter.

Operating expenses increased 16.4% from the year-ago figure to $1.45 billion. Selling, general and administrative expenses also increased 16.6% from the year-ago level to $180.9 million.

ABM Industries Incorporated Price, Consensus and EPS Surprise

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 fourth-quarter fiscal 2021 with cash and cash equivalents of $62.8 million compared with $505.4 million at the end of the prior quarter. Long-term debt was $852.8 million compared with $623.8 million at the end of the prior quarter.

Net cash generated from operating activities totaled $55.6 million for the reported quarter. Free cash flow came in at $44.6 million.

Dividend Payout

ABM Industries’ board of directors announced a dividend hike of 2.6%, thereby raising the quarterly cash dividend from 19 cents per share to 19.5 cents. The raised dividend will be paid on Feb 7, 2022 to stockholders of record as of Jan 6, 2022. This marked the 223rd consecutive quarterly cash dividend by the company.

Fiscal 2022 Guidance

For fiscal 2022, ABM Industries unveiled its guidance for adjusted income from continuing operations in the range of $3.30-$3.55 per share. The Zacks Consensus Estimate for the metric of $3.41 falls within the updated guidance.

Currently, ABM Industries carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performances of Other Business Services Companies

Equifax’s (EFX - Free Report) third-quarter 2021 adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6% but declined on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6% and improved 14.5% year over year on a reported and 14% on a local-currency basis.

IQVIA’s (IQV - Free Report) third-quarter 2021 adjusted earnings per share of $2.17 beat the consensus mark by 1.9% and improved 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1% and increased 21.7% year over year on a reported and 21.1% on a constant-currency basis.

Omnicom’s (OMC - Free Report) third-quarter 2021 adjusted earnings of $1.65 per share beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion also surpassed the consensus estimate by 0.6% and increased 7.1% year over year.