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ABM Industries (ABM) Q4 Earnings Lag Estimates, Revenues Top

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Zacks Equity Research
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ABM Industries Inc.ABM reported mixed fourth-quarter fiscal 2020 results, wherein earnings missed the Zacks Consensus Estimate while revenues outpaced the same.

Adjusted earnings from continuing operations came in at 69 cents per share, which missed the consensus mark by 4.2% but improved 4.5% year over year. The bottom line benefited from higher margin improvement in Work Orders and persistent management of direct labor to align with the operating environment. The company continued its operational investments in its EnhancedClean program and re-engaged corporate projects within certain areas like information technology (which were previously paused due to the pandemic).

Total revenues of $1.48 billion beat the consensus estimate by 2.7% but declined 9.9% from the year-ago quarter. The year-over-year decline was due to coronavirus-related client disruptions, such as facility closures and service-scope changes within the company's Aviation and Technical Solutions segments. These were, however, partially offset by huge demand for COVID-related work orders in the Business & Industry, and Technology & Manufacturing segments.

Segment-wise Revenues

Business & Industry revenues decreased 1.6% year over year to $794.3 million. Aviation revenues decreased 43.9% year over year to $141 million. Education revenues of $212.2 million decreased 0.7% from the prior-year quarter. Technical Solutions revenues decreased 29.8% year over year to $123.1 million.  

Technology & Manufacturing revenues improved 6.7% year over year to $245.2 million.

Operating Results

Adjusted EBITDA came in at $92.5 million compared with $93 million in the prior-year quarter. However, adjusted EBITDA margin rose to 6.2% from 5.6% in the year-ago quarter.

Adjusted income from continuing operations was $46.7 million, up 4.5% year over year. Operating expenses decreased 14.5% from the year-ago quarter to $1.24 billion. Selling, general and administrative expenses increased 38.4% from the year-ago quarter to $155.1 million.

ABM Industries Incorporated Price, Consensus and EPS Surprise

 

ABM Industries Incorporated Price, Consensus and EPS Surprise
ABM Industries Incorporated Price, Consensus and EPS Surprise

ABM Industries Incorporated price-consensus-eps-surprise-chart | ABM Industries Incorporated Quote

Balance Sheet & Cash Flow

ABM Industries exited fourth-quarter fiscal 2020 with cash and cash equivalents of $394.2 million compared with $229.4 million at the end of the prior quarter. Long-term debt was $603 million compared with $664.2 million at the end of the prior quarter.

Net cash generated from operating activities totaled $198.7 million in the reported quarter. Free-cash flow came in at $189.6 million.

Dividend Payout

ABM Industries paid out a quarterly cash dividend of 18.5 cents per share, leading to $12.3 million of total dividend payout in the reported quarter. Additionally, the company’s board of directors announced a dividend hike of 2.7%, thereby raising the quarterly cash dividend to 19 cents. The raised dividend will be paid on Feb 1, 2021, to its shareholders of record as of Jan 7, 2021. This marked the 219th consecutive quarterly cash dividend declared by the company.

First-Quarter Fiscal 2021 Guidance

For the first quarter of fiscal 2021, ABM Industries expects adjusted income from continuing operations in the range of 60 to 65 cents per share. The Zacks Consensus Estimate of 51 cents lies below the 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 Some Other Services Companies

Equifax Inc. EFX reported third-quarter 2020 adjusted earnings of $1.87 per share that beat the Zacks Consensus Estimate by 16.2% and improved 26.4% on a year-over-year basis. Revenues of $1.07 billion outpaced the consensus estimate by 5.9% and improved 22% year over year.

ManpowerGroup Inc. MAN reported third-quarter 2020 earnings of $1.12 per share, beating the consensus mark by 90.5% but declining more than 37.5% year over year. Revenues of $4.58 billion surpassed the consensus mark by 8.7% but declined 12.7% year over year.

IHS Markit Ltd. INFO recorded third-quarter fiscal 2020 adjusted earnings per share of 77 cents that surpassed the consensus estimate by 11.6% and increased 15% on a year-over-year basis. Total revenues came in at $1.07 billion, marginally beating the consensus mark but declining 4% from the year-ago quarter.

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