ABM Industries Incorporated ABM reported impressive first-quarter fiscal 2024 results, wherein earnings per share (EPS) and revenues beat the Zacks Consensus Estimate.

ABM’s EPS (excluding 16 cents from non-recurring items) was 86 cents per share, which surpassed the Zacks Consensus Estimate by 19.4% and increased 8.9% from the prior-year quarter. Total revenues of $2.1 billion beat the consensus mark by 2.9% and improved 3.9% from first-quarter fiscal 2023.

The company’s shares have gained 10.9% in the past six months, underperforming the 21.8% rally of the industry it belongs to.

ABM Industries Incorporated Price, Consensus and EPS Surprise

 

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

Segmental Revenues

Revenues from the Manufacturing & Distribution segment rose 5.4% to $400.9 million, beating our estimate of $381.9 million. The uptick was due to increasing demand and an efficient sales strategy.

The Aviation segment’s revenues increased 17.5% from the prior-year quarter to $249.5 million and surpassed our estimate of $229 million. The metric was driven primarily by strong demand for business travel and leisure.

Technical Solutions increased 12.9% from first-quarter fiscal 2023 to $165.9 million. The metric beat our anticipation of $149.2 million. The uptick in Technical Solutions revenues was driven by the completion of multiple battery energy storage projects.

The Education segment’s revenues increased 2.4% from the prior-year quarter to $220.1 million, surpassing our estimate of $216.1 million. The increase in this segment’s revenues resulted from an improved labor market that reduced overtime expenses.

The Business & Industry segment’s revenues decreased marginally from the prior-year quarter to $1.03 billion and met our estimate. The marginal decline in revenues was due to the slow-paced business activities of the commercial real estate market.

Profitability Performance

Adjusted EBITDA was $116.7 million, down 4.9% from the year-ago quarter. The adjusted EBITDA margin was 5.6%, down 60 basis points from first-quarter fiscal 2023.

Balance Sheet & Cash Flow

ABM Industries exited first-quarter fiscal 2024 with cash and cash equivalents of $58 million compared with $69.5 million at the end of the prior quarter. Long-term debt (net) was $1.3 billion compared with $1.28 billion at the end of the prior quarter. Net cash utilized by operating activities was $139.2 million for the quarter. The free cash flow utilized was $4.3 million.

2024 Guidance

For fiscal 2024, ABM Industries expects adjusted EPS of $3.30-$3.45. The Zacks Consensus Estimate for EPS of $3.3 is pegged below the mid-point ($3.38) of the company’s guided range. The adjusted EBITDA margin is anticipated between 6.2% and 6.5%. Interest expenses are expected between $82 million and $86 million.