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ABM Industries (ABM) Q3 Earnings Miss Estimates, Revenues Beat
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ABM Industries Inc. (ABM - Free Report) reported mixed third-quarter fiscal 2023 results wherein earnings missed the Zacks Consensus Estimate while revenues beat the same.
Adjusted earnings (considering 68 cents from non-recurring items) came in at 79 cents per share, which missed the consensus estimate by 10.2% and decreased 16% from last fiscal year’s quarterly figure.
Total revenues of $2.03 billion beat the consensus mark by a slight margin but improved 3.4% from the last fiscal year’s quarterly figure. The upside was backed by solid segmental performance, strength from new accounts which came online late last year and the acquisition of RavenVolt. Quarterly revenue growth included 2.5% organic growth and a 0.9% upside from acquisitions.
ABM Industries Incorporated Price, Consensus and EPS Surprise
The Business & Industry segment’s revenues decreased 1.2% from the last fiscal year’s quarterly figure to $1.02 billion, thus matching our estimates.
Revenues from the Manufacturing & Distribution segment rose 6.6% to $381.9 million, beating our estimate by 2%. The Aviation segment’s revenues rose 16.9% from the last fiscal year’s quarterly figure to $238 million and surpassed our estimate by 9.7%.
Technical Solutions and Education segments’ revenues increased 6% and 5.6% from the prior-year fiscal quarter’s levels to $167.9 million and $219.1 million, respectively. Revenues from the Education segment beat our estimate by 4%.
Operating Results
Adjusted EBITDA came in at $125.3 million, decreasing marginally from the prior-year period. Adjusted EBITDA margin was 6.4% compared with 6.6% reported in the prior-year period.
Operating expenses increased 4.1% from the year-ago figure to $1.77 billion. Selling, general and administrative expenses declined 34.3% from the year-ago level to $104.3 million.
Balance Sheet & Cash Flow
ABM Industries exited third-quarter fiscal 2023 with cash and cash equivalents of $97.7 million compared with $71.2 million at the end of the prior fiscal quarter. Long-term debt was $1.29 billion compared with $1.4 billion at the end of the prior fiscal quarter.
Net cash provided by operating activities totaled $149.1 million for the reported quarter. Free cash flow came in at $138.3 million.
2023 Guidance
For fiscal 2023, ABM Industries expects adjusted earnings per share to be in the range of $3.40-$3.50, which is narrower than the previous guidance of earnings per share of $3.40-$3.60. The Zacks Consensus Estimate of earnings of $3.51 per share lies above the guided range. Adjusted EBITDA margin is anticipated to be between 6.5% and 6.8%. Interest expense is expected to be at around $80 million.
Here are a few stocks from the broader Business Services sector, which have performed well in their recent earnings release:
Automatic Data (ADP - Free Report) reported better-than-expected fourth-quarter fiscal 2023 results. Adjusted earnings per share of $1.89 (excluding 1 cent from non-recurring items) beat the Zacks Consensus Estimate by 3.3% and grew 26% from the year-ago fiscal quarter’s figure. Total revenues of $4.47 billion beat the consensus estimate by 1.8% and improved 8.5% from the year-ago fiscal quarter’s reading on a reported basis and 9% on an organic constant-currency basis.
TransUnion (TRU - Free Report) reported impressive second-quarter 2023 results wherein earnings and revenues beat the Zacks Consensus Estimate. Quarterly adjusted earnings of 86 cents per share (adjusting 58 cents from non-recurring items) surpassed the consensus mark by 3.6% but decreased 12.2% year over year. Total revenues of $968 million beat the consensus mark by 1% and increased 2.1% year over year on a reported basis. Revenues were up 3% on a constant-currency basis, mainly driven by strength in the international markets.
Gartner (IT - Free Report) reported better-than-expected second-quarter 2023 results. Adjusted earnings per share (excluding 37 cents from non-recurring items) of $2.85 beat the Zacks Consensus Estimate by 14.9% but matched the year-ago reported figure. Revenues of $1.5 billion beat the consensus estimate by 1% and improved 9.2% year over year on a reported basis and 10% on a foreign-currency-neutral basis. Total contract value was $4.6 billion, up 8.9% year over year on a foreign-currency-neutral basis.
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ABM Industries (ABM) Q3 Earnings Miss Estimates, Revenues Beat
ABM Industries Inc. (ABM - Free Report) reported mixed third-quarter fiscal 2023 results wherein earnings missed the Zacks Consensus Estimate while revenues beat the same.
Adjusted earnings (considering 68 cents from non-recurring items) came in at 79 cents per share, which missed the consensus estimate by 10.2% and decreased 16% from last fiscal year’s quarterly figure.
Total revenues of $2.03 billion beat the consensus mark by a slight margin but improved 3.4% from the last fiscal year’s quarterly figure. The upside was backed by solid segmental performance, strength from new accounts which came online late last year and the acquisition of RavenVolt. Quarterly revenue growth included 2.5% organic growth and a 0.9% upside from acquisitions.
ABM Industries Incorporated Price, Consensus and EPS Surprise
ABM Industries Incorporated price-consensus-eps-surprise-chart | ABM Industries Incorporated Quote
Segment-Wise Revenues
The Business & Industry segment’s revenues decreased 1.2% from the last fiscal year’s quarterly figure to $1.02 billion, thus matching our estimates.
Revenues from the Manufacturing & Distribution segment rose 6.6% to $381.9 million, beating our estimate by 2%. The Aviation segment’s revenues rose 16.9% from the last fiscal year’s quarterly figure to $238 million and surpassed our estimate by 9.7%.
Technical Solutions and Education segments’ revenues increased 6% and 5.6% from the prior-year fiscal quarter’s levels to $167.9 million and $219.1 million, respectively. Revenues from the Education segment beat our estimate by 4%.
Operating Results
Adjusted EBITDA came in at $125.3 million, decreasing marginally from the prior-year period. Adjusted EBITDA margin was 6.4% compared with 6.6% reported in the prior-year period.
Operating expenses increased 4.1% from the year-ago figure to $1.77 billion. Selling, general and administrative expenses declined 34.3% from the year-ago level to $104.3 million.
Balance Sheet & Cash Flow
ABM Industries exited third-quarter fiscal 2023 with cash and cash equivalents of $97.7 million compared with $71.2 million at the end of the prior fiscal quarter. Long-term debt was $1.29 billion compared with $1.4 billion at the end of the prior fiscal quarter.
Net cash provided by operating activities totaled $149.1 million for the reported quarter. Free cash flow came in at $138.3 million.
2023 Guidance
For fiscal 2023, ABM Industries expects adjusted earnings per share to be in the range of $3.40-$3.50, which is narrower than the previous guidance of earnings per share of $3.40-$3.60. The Zacks Consensus Estimate of earnings of $3.51 per share lies above the guided range. Adjusted EBITDA margin is anticipated to be between 6.5% and 6.8%. Interest expense is expected to be at around $80 million.
ABM currently holds Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Here are a few stocks from the broader Business Services sector, which have performed well in their recent earnings release:
Automatic Data (ADP - Free Report) reported better-than-expected fourth-quarter fiscal 2023 results. Adjusted earnings per share of $1.89 (excluding 1 cent from non-recurring items) beat the Zacks Consensus Estimate by 3.3% and grew 26% from the year-ago fiscal quarter’s figure. Total revenues of $4.47 billion beat the consensus estimate by 1.8% and improved 8.5% from the year-ago fiscal quarter’s reading on a reported basis and 9% on an organic constant-currency basis.
TransUnion (TRU - Free Report) reported impressive second-quarter 2023 results wherein earnings and revenues beat the Zacks Consensus Estimate. Quarterly adjusted earnings of 86 cents per share (adjusting 58 cents from non-recurring items) surpassed the consensus mark by 3.6% but decreased 12.2% year over year. Total revenues of $968 million beat the consensus mark by 1% and increased 2.1% year over year on a reported basis. Revenues were up 3% on a constant-currency basis, mainly driven by strength in the international markets.
Gartner (IT - Free Report) reported better-than-expected second-quarter 2023 results. Adjusted earnings per share (excluding 37 cents from non-recurring items) of $2.85 beat the Zacks Consensus Estimate by 14.9% but matched the year-ago reported figure. Revenues of $1.5 billion beat the consensus estimate by 1% and improved 9.2% year over year on a reported basis and 10% on a foreign-currency-neutral basis. Total contract value was $4.6 billion, up 8.9% year over year on a foreign-currency-neutral basis.