ABM Shares Decline 4% Despite Reporting Q1 Earnings & Revenue Beat

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ABM ABM has reported impressive first-quarter fiscal 2025 results, wherein earnings per share (EPS) and revenues beat the Zacks Consensus Estimate.

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Better-than-expected earnings failed to impress investors, as the ABM stock has declined 4.3% since the release of results on March 12.

ABM’s EPS (excluding 19 cents from non-recurring items) was 87 cents, which outpaced the Zacks Consensus Estimate by 11.5% and gained 1.2% year over year. Total revenues of $2.1 billion surpassed the consensus mark by a slight margin and increased 2.2% from the year-ago quarter.

The company’s shares have gained 10% in the past year, outperforming the 2.3% rally of the industry and the 9.5% rise of the Zacks S&P 500 composite.

ABM Industries Incorporated Price, Consensus and EPS Surprise

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

ABM’s Segmental Revenues

The Business & Industry segment’s revenues declined 1% on a year-over-year basis to $1 billion and met our estimate. The Manufacturing & Distribution segment revenues decreased 1.6% from the year-ago quarter to $394.3 million, surpassing our projection of $388.3 million. The company exited a contract with a sizable client, thereby hurting this segment’s revenues.

The aviation segment’s revenues increased 8.2% from the year-ago quarter to $270.1 million and beat our estimate of $267.5 million. Healthy travel markets and business wins from both the airport and airline sides of the business drove this segment’s revenues.

The education segment’s revenues were $225.3 million, a 2.4% rise from the year-ago quarter. It beat our estimate of $220.5 million. Revenues in this segment grew on the back of favorable net pricing, a surge in work orders, and stable retention rates.

Technical solutions gained 21.9% from first-quarter fiscal 2024 to $202.3 million. The metric missed our estimate of $205.8 million. Organic growth, fueled by robust microgrid project activity and the Quality Uptime Services buyout, improved this segment’s revenues.

Profitability Performance of ABM

Adjusted EBITDA was $120.6 million, up 3.3% from the year-ago quarter. The adjusted EBITDA margin was 5.9%, flat with first-quarter fiscal 2024.

ABM’s Balance Sheet & Cash Flow

The company exited first-quarter fiscal 2025 with cash and cash equivalents of $59 million compared with $64.6 million at the end of the preceding quarter. The long-term debt (net) was $1.5 billion compared with $1.3 billion in the fourth quarter of fiscal 2024. Net cash utilized by operating activities was $106.2 million for the quarter. The free cash flow utilized was $122.9 million.

ABM’s FY25 Guidance

The company updated its EPS guidance for fiscal 2025. ABM expects an adjusted EPS of $3.65-$3.80 compared with the preceding quarter’s view of $3.60-$3.80. The mid-point of the guided range ($3.73) is in line with the Zacks Consensus Estimate.

ABM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Snapshot

IQVIA Holdings Analytics Inc. IQV posted impressive fourth-quarter 2024 results.

IQV’s adjusted earnings were $3.12 per share, outpacing the Zacks Consensus Estimate marginally and rising 9.9% on a year-over-year basis. Total revenues of $4 billion surpassed the consensus estimate by a slight margin and grew 2.3% from the year-ago quarter.

Corpay CPAY posted mixed fourth-quarter 2024 results.

CPAY’s EPS of $5.36 beat the consensus estimate by a slight margin and increased 20.7% year over year. The total revenues of $1 billion missed the consensus estimate by 1.5% but grew 10.4% from the year-ago quarter.

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This article originally published on Zacks Investment Research (zacks.com).

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