ABM Industries Inc. (ABM) reported strong third-quarter earnings, exceeding analysts’ expectations and sending its shares soaring in pre-market trading. The company’s revenue grew by 3.3% year-over-year to $2.09 billion, surpassing the consensus estimate of $2.037 billion. This growth was driven by strong performance in its Technical Solutions and Aviation segments, which saw revenue increases of 25% and 13% year-over-year, respectively. The Education segment also saw a modest 4% year-over-year increase in revenue.
While operating expenses rose by 3.7% year-over-year, reaching $1.83 billion, operating profit declined significantly by 73.1% to $37.4 million in the quarter. However, adjusted EBITDA rose 2% year-over-year to $128.1 million, with the margin remaining flat at 6.4%. The company’s adjusted EPS of $0.94 also beat the consensus estimate of $0.86, marking a 19% year-over-year increase.
ABM’s operating cash flow for the quarter totaled $79.5 million, down from $149.1 million a year ago. As of July-end, the company held cash and equivalents of $86.3 million. The company also declared a cash dividend of $0.225 per common share, payable on November 4, 2024, to shareholders of record on October 3, 2024.
Scott Salmirs, President & Chief Executive Officer, expressed his satisfaction with the company’s performance, highlighting the role of investments in energy resiliency markets and technology in driving growth. He emphasized the company’s focus on market segmentation and its weighting towards higher-performing Class A properties, which contributed to the strong performance in its Business & Industry segment, despite a challenging commercial real estate environment.
Reflecting the positive results, ABM raised its adjusted EPS outlook for 2024 to $3.48 – $3.55, up from the previous guidance of $3.40 – $3.50. This revised outlook surpasses the consensus estimate of $3.47. As a result, ABM shares were up 6.95% at $60.00 in pre-market trading on Friday.
