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Business services provider ABM Industries Incorporated (ABM - Free Report) recorded relatively healthy first-quarter fiscal 2017 (ended Jan 31, 2017) results on the back of revenue improvements across all the operating segments. Adjusted earnings (from continuing operations) for the reported quarter were $21.5 million or 38 cents per share compared with $21.6 million or 38 cents per share in the year-ago quarter. Although adjusted earnings remained flat year over year, it comprehensively beat the Zacks Consensus Estimate by 5 cents.
On a GAAP basis, net loss for the reported quarter was $56.8 million or loss of $1.00 per share against net income of $14.0 million or 24 cents per share in the year-earlier quarter. The year-over-year decline, despite higher revenues, was primarily attributable to a net loss of $72.9 million from discontinued operations. GAAP income from continuing operations improved to $16.1 million or 28 cents per share from $13.6 million or 24 cents per share in the prior-year quarter.
Top-Line Improvement
Revenues for the reported quarter increased 4.6% year over year to $1,326.7 million, driven largely by growth in the Aviation segment due to new businesses from existing clients and higher work order (tag) sales. Organic growth improved 3.6% year over year, while inorganic growth added $12.2 million of incremental revenues during the quarter. Quarterly revenues exceeded the Zacks Consensus Estimate of $1,309 million.
Operating profit improved to $23.8 million from $13.6 million in the year-ago period, owing to higher revenue contribution and organizational savings due to the Vision 2020 plan. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) for the reported quarter increased to $48.1 million from $43.7 million in the year-earlier quarter for respective margins of 3.6% and 3.4%.
ABM Industries Incorporated Price, Consensus and EPS Surprise
Cash and cash equivalents at quarter end were $42.6 million with total debt aggregating $443.9 million. Net cash provided by operating activities during the quarter was $27 million compared with $119.4 million in the prior-year period.
During the quarter, the company repurchased approximately 0.2 million shares for $7.9 million. As of Jan 31, 2017, ABM had shares worth $134.1 million remaining for repurchase under its $200 million share buyback program.
Fiscal 2017 Guidance Reiterated
With strong quarterly results and steady progress in its Vision 2020 plan, ABM reiterated its earlier fiscal-2017 guidance. For the fiscal year, it continues to expect adjusted income from continuing operations in the range of $1.80–$1.90 per share, while GAAP income from continuing operations is expected within $1.40–$1.50 per share.
Going Forward
ABM’s comprehensive, strategic and transformation initiative is focused on driving sustainable profitability by effectively allocating resources to higher margin services and business verticals with a strong competitive edge. We expect this to fuel the company’s growth momentum in the coming quarters.
CACI International has a long-term earnings growth expectation of 10%. It has beaten earnings estimates in each of the trailing four quarters for a positive surprise of 31.89%.
Rollins has beaten earnings estimates twice in the trailing four quarters for a positive surprise of 2.9%.
CGI Group has a long-term earnings growth expectation of 8%.
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ABM Industries (ABM) Beats Q1 Earnings, Affirms FY17 View
Business services provider ABM Industries Incorporated (ABM - Free Report) recorded relatively healthy first-quarter fiscal 2017 (ended Jan 31, 2017) results on the back of revenue improvements across all the operating segments. Adjusted earnings (from continuing operations) for the reported quarter were $21.5 million or 38 cents per share compared with $21.6 million or 38 cents per share in the year-ago quarter. Although adjusted earnings remained flat year over year, it comprehensively beat the Zacks Consensus Estimate by 5 cents.
On a GAAP basis, net loss for the reported quarter was $56.8 million or loss of $1.00 per share against net income of $14.0 million or 24 cents per share in the year-earlier quarter. The year-over-year decline, despite higher revenues, was primarily attributable to a net loss of $72.9 million from discontinued operations. GAAP income from continuing operations improved to $16.1 million or 28 cents per share from $13.6 million or 24 cents per share in the prior-year quarter.
Top-Line Improvement
Revenues for the reported quarter increased 4.6% year over year to $1,326.7 million, driven largely by growth in the Aviation segment due to new businesses from existing clients and higher work order (tag) sales. Organic growth improved 3.6% year over year, while inorganic growth added $12.2 million of incremental revenues during the quarter. Quarterly revenues exceeded the Zacks Consensus Estimate of $1,309 million.
Operating profit improved to $23.8 million from $13.6 million in the year-ago period, owing to higher revenue contribution and organizational savings due to the Vision 2020 plan. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) for the reported quarter increased to $48.1 million from $43.7 million in the year-earlier quarter for respective margins of 3.6% and 3.4%.
ABM Industries Incorporated Price, Consensus and EPS Surprise
ABM Industries Incorporated Price, Consensus and EPS Surprise | ABM Industries Incorporated Quote
Financial Position
Cash and cash equivalents at quarter end were $42.6 million with total debt aggregating $443.9 million. Net cash provided by operating activities during the quarter was $27 million compared with $119.4 million in the prior-year period.
During the quarter, the company repurchased approximately 0.2 million shares for $7.9 million. As of Jan 31, 2017, ABM had shares worth $134.1 million remaining for repurchase under its $200 million share buyback program.
Fiscal 2017 Guidance Reiterated
With strong quarterly results and steady progress in its Vision 2020 plan, ABM reiterated its earlier fiscal-2017 guidance. For the fiscal year, it continues to expect adjusted income from continuing operations in the range of $1.80–$1.90 per share, while GAAP income from continuing operations is expected within $1.40–$1.50 per share.
Going Forward
ABM’s comprehensive, strategic and transformation initiative is focused on driving sustainable profitability by effectively allocating resources to higher margin services and business verticals with a strong competitive edge. We expect this to fuel the company’s growth momentum in the coming quarters.
ABM currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include CACI International Inc (CACI - Free Report) , Rollins, Inc. (ROL - Free Report) and CGI Group Inc. (GIB - Free Report) , each carrying Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CACI International has a long-term earnings growth expectation of 10%. It has beaten earnings estimates in each of the trailing four quarters for a positive surprise of 31.89%.
Rollins has beaten earnings estimates twice in the trailing four quarters for a positive surprise of 2.9%.
CGI Group has a long-term earnings growth expectation of 8%.
8 Stocks with Huge Profit Potential
Just released: Driverless Cars: Your Roadmap to Mega-Profits Today. In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>