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ABM Industries (ABM) Q1 Earnings, Revenues Beat Mark, View Up

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ABM Industries Inc.(ABM - Free Report)  reported solid first-quarter fiscal 2022 results, with earnings and revenues beating the Zacks Consensus Estimate.

Adjusted earnings from continuing operations came in at 94 cents per share, beating the consensus mark by 19% but decreasing 7% year over year. The bottom line benefited from higher operational earnings across the industry groups, inclusive of the Able acquisition and gain on the sale of select healthcare customer contracts. These positives, however, were partially offset by Able’s integration costs, a decline in the volume of higher-margin virus protection services and work orders, an additional workday compared to the prior-year period, and higher corporate expenses.

Total revenues of $1.94 billion beat the consensus estimate by 5.5% and rose 29.7% from the year-ago level. The upside was backed by contribution from Able acquisition, solid demand for its core janitorial and engineering services, and continued recovery in the Aviation industry. Quarterly revenue growth includes 9.1% organic growth and 20.6% from the Able acquisition.

The combination of higher revenues and continued labor productivity boosted first-quarter results.

Over the past year, shares of ABM Industries have declined 13.2% compared with 2.3% loss of the industry it belongs to.

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Let’s check out the numbers.

Segment-Wise Revenues

Business & Industry revenues increased 49.2% year over year to $1.03 billion. Manufacturing & Distribution revenues inched up 5.4% year over year to $359.1 million. Aviation revenues increased 42.1% year over year to $200.3 million. Technical Solutions revenues increased 25.9% year over year to $141.8 million.

Education revenues of $205.7 million, however, decreased 1.1% from the prior-year quarter.

Operating Results

Adjusted EBITDA came in at $123 million compared with $123.7 million in the year-ago quarter. Adjusted EBITDA margin was 6.6% compared with 8.6% in the year-ago quarter.

Operating expenses increased 32.8% from the year-ago figure to $1.66 billion. Selling, general and administrative expenses also increased 24.9% from the year-ago level to $153.1 million.

Balance Sheet & Cash Flow

ABM Industries exited first-quarter fiscal 2022 with cash and cash equivalents of $46.6 million compared with $62.8 million at the end of the prior quarter. Long-term debt was $971.9 million compared with $852.8 million at the end of the prior quarter.

Net cash used in operating activities totaled $93.6 million for the reported quarter. Free cash flow came in at $103.2 million.

Dividend Payout & Share Repurchase

ABM Industries’ board of directors declared a quarterly cash dividend of 19.5 cents per share. The dividend will be paid on May 2, 2022 to stockholders of record as of Apr 7, 2022. This marked the 224th consecutive quarterly cash dividend by the company.

During the reported quarter, the company repurchased 0.3 million shares at an average price of $44.23, for a total cost of $13.3 million.

Fiscal 2022 Guidance

For fiscal 2022, ABM Industries raised its guidance for adjusted income from continuing operations in the range of $3.50-$3.70 per share from the prior guidance of $3.30-$3.55. The Zacks Consensus Estimate for the metric of $3.41 lies below 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.

Performance of Other Business Services Companies

Robert Half International (RHI - Free Report) delivered impressive fourth-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate.

Robert Half’s quarterly earnings of $1.51 per share beat the consensus mark by 5.6% and rose 79.8% year over year.

Robert Half’s revenues of $1.77 billion surpassed the consensus mark by 4.3% and increased 36.2% year over year on a reported basis and 36% on an as-adjusted basis.

Automatic Data Processing (ADP - Free Report) reported better-than-expected second-quarter fiscal 2022 results.

ADP’s adjusted earnings per share of $1.65 beat the Zacks Consensus Estimate by 1.2% and rose 9% year over year.

ADP’s total revenues of $4.03 billion beat the consensus mark by 1.1% and improved 9% year over year on a reported basis as well as on an organic constant-currency basis.

Rollins (ROL - Free Report) reported mixed fourth-quarter 2021 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same.

Rollins’ adjusted earnings of 14 cents per share meet the Zacks Consensus Estimate and increased 7.7% year over year.

Rollins’ revenues of $600.3 million beat the consensus mark by 3.3% and improved 11.9% year over year.

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