ABM Industries Delivers Solid Q3 Results On Investment In Energy Market, Boosts Guidance

ABM Industries Inc. ABM shares are trading higher after the company reported third-quarter earnings and raised guidance.

Sales grew 3.3% Y/Y to $2.09 billion, beating the consensus of $2.037 billion. Revenue growth was driven by Technical Solutions (+25% Y/Y) and Aviation (+13%), with Education increasing by 4% Y/Y.

Operating expenses increased 3.7% Y/Y to $1.83 billion, and operating profit declined 73.1% Y/Y to $37.4 million in the quarter.

Adjusted EBITDA rose 2% Y/Y to $128.1 million, with the margin remaining flat Y/Y at 6.4%. Adjusted EPS of $0.94, up 19% Y/Y, beating the consensus of $0.86.

Operating cash flow for the quarter totaled $79.5 million, down from $149.1 million a year ago. As of July-end, ABM held cash and equivalents of $86.3 million.

Dividend: ABM 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, said, “Our investments in the energy resiliency markets, particularly in microgrids, which grew significantly, as well as those investments in technology, including tools that improve labor efficiency and our go-to-market approach, helped us deliver another quarter of solid organic growth on an enterprise level and resilient margins.”

“This performance was supported by our focus on market segmentation, especially our purposeful weighting towards higher performing Class A properties, which enabled us to once again perform well in our Business & Industry segment, despite a still choppy commercial real estate environment.”

2024 Outlook: ABM raised the adjusted EPS outlook to $3.48 – $3.55 (from $3.40 – $3.50) versus the $3.47 consensus.

Price Action: ABM shares are up 6.95% at $60.00 premarket at the last check Friday.

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