Why Facility Management Provider ABM Industries Shares Are Shooting Higher Today

ABM Industries Inc ABM shares are trading higher after it reported fourth-quarter FY23 earnings and provided guidance.

ABM reported fourth-quarter FY23 sales growth of 4.1% year-on-year to $2.09 billion, beating the analyst consensus estimate of $2.03 billion.

Selling, general and administrative expenses rose 1% to $161.3 million. Operating income for the quarter rose 34.5% to $106.4 million, with an operating margin of 5.1%.

Adjusted EPS of $1.01 beat the consensus estimate of $0.92.

Adjusted EBITDA grew 10% to $144.2 million with an adjusted EBITDA margin of 7.2%, a 40 basis point increase Y/Y.

Operating cash flow for the quarter totaled $139.1 million. ABM held cash and equivalents of $69.5 million as of Oct. 31, 2023.

During the fourth quarter, the company repurchased 2.7 million shares of common stock with a total cost of $110.0 million. Subsequent to the end of the fourth quarter, ABM's Board approved a $150 million expansion of the existing share repurchase authorization. The total current authorization now stands at approximately $210 million. 

ABM's quarterly cash dividend of $0.225 per common share, which is a 2.3% increase from the prior quarterly cash dividend, is payable on Feb. 5, 2024, to shareholders of record on Jan. 4, 2024.

Outlook: ABM expects FY24 adjusted EPS of $3.20-$3.40 versus an estimate of $3.28. It sees an adjusted EBITDA margin of 6.2%-6.5% and an interest expense of $82 million-$86 million.

Price Action: ABM shares are trading higher by 13.3% at $50.26 on Wednesday.

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