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ABM Industries (ABM) Stock Down 2.9% Despite Q1 Earnings Beat
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ABM Industries Inc. (ABM - Free Report) first-quarter fiscal 2023 earnings beat the Zacks Consensus Estimate while revenues missed.
Adjusted earnings (excluding 21 cents from non-recurring items) from continuing operations came in at 79 cents per share, which beat the Zacks Consensus Estimate by 2.6% but decreased 16% from last fiscal year’s quarterly figure.
ABM Industries Incorporated Price, Consensus and EPS Surprise
Total revenues of $1.99 billion missed the Zacks Consensus Estimate by 1.7% and improved 2.9% from last fiscal year’s quarterly figure. The upside was backed by solid demand across ABM’s Business & Industry, Aviation, Manufacturing & Distribution, Education and Technical Solutions segments, on the strength of new accounts which came online late last year. Quarterly revenue growth included 1% organic growth and a 2% upside from acquisitions.
However, the lower-than-expected revenues might have disappointed investors. As a result, the stock has fallen 2.9% following the earnings release on Mar 8.
Segment-Wise Revenues
Business & Industry’s revenues increased 0.7% from the last fiscal year’s quarterly figure to $1.04 billion. Revenues from Manufacturing & Distribution, and Aviation rose 6% each from the last fiscal year’s quarterly figures to $380.5 million and $212.3 million, respectively. Technical Solutions and Education segments’ revenues increased 3.7% and 4.5% from the prior-year fiscal quarter’s levels to $147 million and $214.9 million, respectively.
Operating Results
Adjusted EBITDA came in at $122.7 million, remaining flat with the prior-year period. Adjusted EBITDA margin was at 6.4% compared with 6.6% reported in the prior-year period.
Operating expenses increased 5.4% from the year-ago figure to $1.75 billion. Selling, general and administrative expenses declined 1.6% from the year-ago level to $150.6 million.
Balance Sheet & Cash Flow
ABM Industries exited first-quarter fiscal 2023 with cash and cash equivalents of $87.9 million compared with $73 million at the end of the prior fiscal quarter. Long-term debt was $1.2 billion compared with $1.1 billion at the end of the prior fiscal quarter.
Net cash used in operating activities totaled $70.9 million for the reported quarter. Free cash flow came in at $84.8 million.
During the reported quarter, ABM paid out dividends worth $14.4 million.
Fiscal 2023 Guidance Reaffirmed
For fiscal 2023, ABM Industries expects adjusted EPS to be in the range of $3.40-$3.60. The midpoint of the guided range ($3.50) lies below the Zacks Consensus Estimate of $3.51. Adjusted EBITDA margin is anticipated to be between 6.4% and 6.8%.
The following stocks from the Business Service sector reported better-than-expected fourth-quarter results.
Gartner, Inc. (IT - Free Report) , currently carrying a Zacks Rank #2(Buy), reported better-than-expected fourth-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate. Adjusted earnings (excluding 49 cents from non-recurring items) per share of $3.70 beat the Zacks Consensus Estimate by 44% and increased 23.8% year over year. IT’s revenues of $1.5 billion beat the Zacks Consensus Estimate by 2.6% and improved 15.2% year over year on a reported basis and 20% on a foreign-currency-neutral basis.
Aptiv PLC (APTV - Free Report) , currently carrying a Zacks Rank of 3, reported better-than-expected fourth-quarter 2022 results. Adjusted earnings (excluding 41 cents from non-recurring items) of $1.27 per share beat the Zacks Consensus Estimate by 6.7% and increased more than 100% on a year-over-year basis. APTV’s revenues surpassed the Zacks Consensus Estimate by 6% and increased 12.2% year over year.
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ABM Industries (ABM) Stock Down 2.9% Despite Q1 Earnings Beat
ABM Industries Inc. (ABM - Free Report) first-quarter fiscal 2023 earnings beat the Zacks Consensus Estimate while revenues missed.
Adjusted earnings (excluding 21 cents from non-recurring items) from continuing operations came in at 79 cents per share, which beat the Zacks Consensus Estimate by 2.6% but decreased 16% from last fiscal year’s quarterly figure.
ABM Industries Incorporated Price, Consensus and EPS Surprise
ABM Industries Incorporated price-consensus-eps-surprise-chart | ABM Industries Incorporated Quote
Total revenues of $1.99 billion missed the Zacks Consensus Estimate by 1.7% and improved 2.9% from last fiscal year’s quarterly figure. The upside was backed by solid demand across ABM’s Business & Industry, Aviation, Manufacturing & Distribution, Education and Technical Solutions segments, on the strength of new accounts which came online late last year. Quarterly revenue growth included 1% organic growth and a 2% upside from acquisitions.
However, the lower-than-expected revenues might have disappointed investors. As a result, the stock has fallen 2.9% following the earnings release on Mar 8.
Segment-Wise Revenues
Business & Industry’s revenues increased 0.7% from the last fiscal year’s quarterly figure to $1.04 billion. Revenues from Manufacturing & Distribution, and Aviation rose 6% each from the last fiscal year’s quarterly figures to $380.5 million and $212.3 million, respectively. Technical Solutions and Education segments’ revenues increased 3.7% and 4.5% from the prior-year fiscal quarter’s levels to $147 million and $214.9 million, respectively.
Operating Results
Adjusted EBITDA came in at $122.7 million, remaining flat with the prior-year period. Adjusted EBITDA margin was at 6.4% compared with 6.6% reported in the prior-year period.
Operating expenses increased 5.4% from the year-ago figure to $1.75 billion. Selling, general and administrative expenses declined 1.6% from the year-ago level to $150.6 million.
Balance Sheet & Cash Flow
ABM Industries exited first-quarter fiscal 2023 with cash and cash equivalents of $87.9 million compared with $73 million at the end of the prior fiscal quarter. Long-term debt was $1.2 billion compared with $1.1 billion at the end of the prior fiscal quarter.
Net cash used in operating activities totaled $70.9 million for the reported quarter. Free cash flow came in at $84.8 million.
During the reported quarter, ABM paid out dividends worth $14.4 million.
Fiscal 2023 Guidance Reaffirmed
For fiscal 2023, ABM Industries expects adjusted EPS to be in the range of $3.40-$3.60. The midpoint of the guided range ($3.50) lies below the Zacks Consensus Estimate of $3.51. Adjusted EBITDA margin is anticipated to be between 6.4% and 6.8%.
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.
Recent Releases
The following stocks from the Business Service sector reported better-than-expected fourth-quarter results.
Gartner, Inc. (IT - Free Report) , currently carrying a Zacks Rank #2(Buy), reported better-than-expected fourth-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate. Adjusted earnings (excluding 49 cents from non-recurring items) per share of $3.70 beat the Zacks Consensus Estimate by 44% and increased 23.8% year over year. IT’s revenues of $1.5 billion beat the Zacks Consensus Estimate by 2.6% and improved 15.2% year over year on a reported basis and 20% on a foreign-currency-neutral basis.
Aptiv PLC (APTV - Free Report) , currently carrying a Zacks Rank of 3, reported better-than-expected fourth-quarter 2022 results. Adjusted earnings (excluding 41 cents from non-recurring items) of $1.27 per share beat the Zacks Consensus Estimate by 6.7% and increased more than 100% on a year-over-year basis. APTV’s revenues surpassed the Zacks Consensus Estimate by 6% and increased 12.2% year over year.