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Why Is ABM Industries (ABM) Down 12.5% Since Last Earnings Report?
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A month has gone by since the last earnings report for ABM Industries (ABM - Free Report) . Shares have lost about 12.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is ABM Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
ABM Industries Surpasses Q2 Earnings Estimates
ABM Industries Inc. reported mixed second-quarter fiscal 2023 results wherein earnings beat the Zacks Consensus Estimate while revenues missed the same.
Adjusted earnings (considering 12 cents from non-recurring items) from continuing operations came in at 90 cents per share, which beat the consensus estimate by 4.7% and increased 1% from last fiscal year’s quarterly figure.
Total revenues of $1.98 billion missed the consensus mark by 1.5% but improved 4.5% from 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 2.3% organic growth and a 2.2% upside from acquisitions.
Segment-Wise Revenues
The Business & Industry segment’s revenues decreased 0.5% from the last fiscal year’s quarterly figure to $998.5 million. Revenues from the Manufacturing & Distribution segment rose 4.5% to $373.2 million and the Aviation segment’s revenues rose 22.2% from the last fiscal year’s quarterly figure to $227.2 million. Technical Solutions and Education segments’ revenues increased 14.6% and 6% from the prior-year fiscal quarter’s levels to $168.4 million and $216.7 million, respectively.
Operating Results
Adjusted EBITDA came in at $137 million, increasing 15.2% from the prior-year period. Adjusted EBITDA margin was at 7.2%, compared with 6.5% reported in the prior-year period.
Operating expenses increased 4.1% from the year-ago figure to $1.72 billion. Selling, general and administrative expenses declined slightly from the year-ago level to $156.6 million.
Balance Sheet & Cash Flow
ABM Industries exited second-quarter fiscal 2023 with cash and cash equivalents of $71.2 million, compared with $87.9 million at the end of the prior fiscal quarter. Long-term debt was $1.4 billion, compared with $1.2 billion at the end of the prior fiscal quarter.
Net cash provided by operating activities totaled $26 million for the reported quarter. Free cash flow came in at $16 million.
2023 Guidance
For fiscal 2023, ABM Industries expects adjusted Earning Per Share to be in the range of $3.40-$3.60. Adjusted EBITDA margin is anticipated to be between 6.5% and 6.8%. Interest expense is expected at around $80 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, ABM Industries has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, ABM Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is ABM Industries (ABM) Down 12.5% Since Last Earnings Report?
A month has gone by since the last earnings report for ABM Industries (ABM - Free Report) . Shares have lost about 12.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is ABM Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
ABM Industries Surpasses Q2 Earnings Estimates
ABM Industries Inc. reported mixed second-quarter fiscal 2023 results wherein earnings beat the Zacks Consensus Estimate while revenues missed the same.
Adjusted earnings (considering 12 cents from non-recurring items) from continuing operations came in at 90 cents per share, which beat the consensus estimate by 4.7% and increased 1% from last fiscal year’s quarterly figure.
Total revenues of $1.98 billion missed the consensus mark by 1.5% but improved 4.5% from 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 2.3% organic growth and a 2.2% upside from acquisitions.
Segment-Wise Revenues
The Business & Industry segment’s revenues decreased 0.5% from the last fiscal year’s quarterly figure to $998.5 million. Revenues from the Manufacturing & Distribution segment rose 4.5% to $373.2 million and the Aviation segment’s revenues rose 22.2% from the last fiscal year’s quarterly figure to $227.2 million. Technical Solutions and Education segments’ revenues increased 14.6% and 6% from the prior-year fiscal quarter’s levels to $168.4 million and $216.7 million, respectively.
Operating Results
Adjusted EBITDA came in at $137 million, increasing 15.2% from the prior-year period. Adjusted EBITDA margin was at 7.2%, compared with 6.5% reported in the prior-year period.
Operating expenses increased 4.1% from the year-ago figure to $1.72 billion. Selling, general and administrative expenses declined slightly from the year-ago level to $156.6 million.
Balance Sheet & Cash Flow
ABM Industries exited second-quarter fiscal 2023 with cash and cash equivalents of $71.2 million, compared with $87.9 million at the end of the prior fiscal quarter. Long-term debt was $1.4 billion, compared with $1.2 billion at the end of the prior fiscal quarter.
Net cash provided by operating activities totaled $26 million for the reported quarter. Free cash flow came in at $16 million.
2023 Guidance
For fiscal 2023, ABM Industries expects adjusted Earning Per Share to be in the range of $3.40-$3.60. Adjusted EBITDA margin is anticipated to be between 6.5% and 6.8%. Interest expense is expected at around $80 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, ABM Industries has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, ABM Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.