ABM Industries (ABM) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.Individual inve ...

Labor and Employment - The company employs approximately 117,000 persons, and labor shortages, turnover, and labor cost increases could adversely affect financial performance [64] - The company may face challenges in attracting and retaining qualified personnel, which is essential for supporting its business [65] - Approximately 42% of the company's employees were subject to various local collective bargaining agreements, some of which will expire or become subject to renegotiation during 2025 [106] - The company is exposed to risks related to labor, including claims of discrimination and violations of wage and hour requirements, which could lead to substantial liabilities [100] Financial Performance and Risks - A significant portion of the company's growth has been generated by acquisitions, which may continue as part of its growth strategy [90] - The company faces competitive pressures in the facility services market, which could reduce margins and adversely affect financial performance [63] - The company relies on long-term client relationships for profitability, and losing significant clients could negatively impact financial results [70] - Economic conditions, such as high interest rates and changes in consumer goods pricing, could reduce demand for the company's services and adversely affect revenue [80] - Changes in insurance costs or the inability to renew insurance policies could have a material adverse effect on the company's financial position [95] - The company’s ability to generate cash flow is subject to general economic and competitive factors beyond its control, impacting its capacity to service debt and fund operations [110] Legal and Regulatory Compliance - The company is subject to extensive legal and regulatory requirements that could increase compliance costs and limit profitability [101] - The company faces potential adverse effects from unfavorable developments in class actions and lawsuits, which may consume significant financial and managerial resources [99] - The company may incur material withdrawal liabilities from participation in multiemployer pension plans if other employers cease contributions [105] International Operations and Currency Risks - The company is exposed to risks related to international operations, including compliance with complex laws and regulations in jurisdictions outside the United States [74] - The company is primarily exposed to foreign exchange rate risk through its operations in the UK and Ireland, with functional currencies being GBP and EUR respectively [255] - The company intends to remain permanently invested in its foreign operations and does not utilize hedging instruments to mitigate foreign currency exchange risks [255] - If the company's intent regarding international investment changes, it would expect to implement strategies to manage foreign currency risks [255] Cybersecurity and Technology - Cybersecurity threats could disrupt the company's information technology systems, leading to operational disruptions and potential financial losses [84] Debt and Interest Rate Management - As of October 31, 2024, the company had total outstanding borrowings of $1,335.3 million [254] - The company entered into interest rate swap agreements with an underlying notional amount of $695.0 million, fixing interest rates ranging from 1.72% to 3.81% [254] - A 100 basis point increase in SOFR, EURIBOR, and SONIA would decrease future earnings and cash flows by $5.6 million and $5.4 million, respectively [254] - The fair value of the company's interest rate swap agreements was an asset of $13.5 million as of October 31, 2024 [254]

Core Viewpoint - ABM Industries' stock experienced a significant decline of over 7% following its FQ4 earnings release, presenting a potential buying opportunity for dividend growth investors as it approaches a critical support level within its long-term trading range [1][10]. Financial Performance - The Q4 report indicated a contraction in cash flow, earnings, and free cash flow, despite a 4% increase in top-line growth driven by a 32% rise in technical solutions and an 11% increase in aviation [2][6]. - Adjusted earnings were reported at $0.90, which was 400 basis points better than MarketBeat's consensus, indicating sufficient cash flow to maintain capital returns and balance sheet health [7]. Dividend Information - ABM Industries offers a dividend yield of 2.11%, with an annual dividend of $1.06 and a three-year annualized dividend growth rate of 16.61% [2][3]. - The company maintains a low dividend payout ratio of 43.80%, allowing for sustainable annual increases in dividends for many years [3]. Balance Sheet and Leverage - The balance sheet remains strong, with increased debt and total liabilities offset by higher assets, resulting in flat equity and low leverage [4][5]. - Long-term debt leverage is reported to be less than 1x equity, indicating a solid financial position [5]. Market Outlook - The company has optimistic guidance for F2025, expecting growth across all end markets, with adjusted EPS forecasted between $3.60 and $3.80, surpassing analysts' consensus [8]. - Institutional ownership exceeds 90%, providing a strong support base for the stock price, with expectations of continued buying activity from institutions [9]. Technical Analysis - The stock price has rebounded after hitting the critical $50 support level, which is seen as a strong target for technical traders [10]. - A move below this level could be bearish, but the prevailing sentiment suggests institutional support will help maintain the price around $50, potentially leading to a retest of the high end of its trading range near $57.50 [10].

Company Overview - A facilities solutions company recently raised its dividend, offering portfolio diversification opportunities [1] - The stock is considered undervalued following a strong earnings report [1] Investment Opportunity - The company's stock is currently on sale, presenting a potential buying opportunity [1] - The company's strong earnings report supports the investment thesis [1] Promotional Offer - Seeking Alpha's premier investing service is offering a 28% discount through specific links in the advertisement [2] - The promotion is part of a holiday sale, with prices set to increase on January 1st [2] - A money-back guarantee is available for unsatisfied customers [3]

Financial Data and Key Metrics Changes - The company reported fourth quarter revenue of $2.2 billion, an increase of 4%, with 3% organic growth and 1% from the acquisition of Quality Uptime Services [33] - Adjusted EPS was $0.90, a decrease of 11% from the prior year, while adjusted net income was $57.5 million, down 13% [36] - Adjusted EBITDA decreased 11% to $128 million, with an adjusted EBITDA margin of 6.1%, down 110 basis points [36] Business Line Data and Key Metrics Changes - Technical Solutions revenue grew 35% to $257.4 million, with 25% organic growth driven by strong microgrid project activity [44] - Aviation revenue increased 11% to $276.5 million, benefiting from strong travel markets and new business wins [40] - Manufacturing & Distribution revenue declined by just under 1% to $387.7 million, primarily due to client rebalancing [41] - Business & Industry (B&I) revenue was approximately $1 billion, declining less than 1%, with operating profit down to $72 million [38] Market Data and Key Metrics Changes - The U.S. commercial real estate market is showing signs of improvement, with declining availability rates and increased leasing activity [20] - The semiconductor market is expected to grow by 15% in the Americas in 2025, while the data center services market is projected to grow 10% annually [22] Company Strategy and Development Direction - The company is focused on strategic investments in artificial intelligence and technology-driven solutions to enhance service offerings and operational efficiency [17][29] - The company aims to return its B&I and Manufacturing & Distribution segments to growth in the back half of 2025, assuming positive market trends continue [51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's positioning for 2025, citing strong execution on initiatives and a resilient business model [9][10] - The company expects adjusted EPS for 2025 to be in the range of $3.60 to $3.80, reflecting a 4% increase over 2024 [51] Other Important Information - The company repurchased $56 million of stock in 2024 and announced an 18% increase in its dividend [18][19] - The company has a backlog exceeding $500 million in its microgrid business, indicating strong future demand [28] Q&A Session Summary Question: M&D segment performance and customer rebalancing - Management noted that while the M&D segment performed better than expected, there are still phases of rebalancing to navigate in fiscal year 2025 [60][62] Question: Technical Solutions remediation charge - Management clarified that the $4 million remediation charge was a rare occurrence related to a technical issue with a past project [64][66] Question: B&I segment discrete costs - Management explained that the $4 million to $5 million in discrete costs were one-time expenses, primarily from legal settlements and a bad debt reserve [70][72] Question: Free cash flow impact from ELEVATE costs - Management confirmed that the anticipated impact of $30 million to $40 million in transformation costs reflects updated estimates for the ELEVATE program [78] Question: Labor cost inflation and recovery rates - Management indicated that labor costs have moderated and are predictable due to recent collective bargaining agreements [94] Question: Aviation market share and growth rate - Management expressed confidence in the Aviation segment's growth, predicting high-single-digit growth for 2025 due to ongoing infrastructure investments [108][110] Question: Capital allocation priorities for 2025 - Management reiterated a balanced approach to capital allocation, focusing on dividends, M&A, and opportunistic share buybacks [114] Question: Employee count and business mix - Management stated that employee count will be relative to revenue growth, with a focus on efficiency and moving towards technical hard services [128]

ABM Industries (ABM) reported $2.18 billion in revenue for the quarter ended October 2024, representing a year-over-year increase of 4%. EPS of $0.90 for the same period compares to $1.01 a year ago.The reported revenue represents a surprise of +4.30% over the Zacks Consensus Estimate of $2.09 billion. With the consensus EPS estimate being $0.86, the EPS surprise was +4.65%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine ...

ABM Industries (ABM) came out with quarterly earnings of $0.90 per share, beating the Zacks Consensus Estimate of $0.86 per share. This compares to earnings of $1.01 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 4.65%. A quarter ago, it was expected that this provider of cleaning and other maintenance services for commercial buildings, hospitals and airports would post earnings of $0.85 per share when it actually produced ea ...

Fourth Quarter 2024 Earnings Presentation December 18, 2024 1 Forward Looking Statements This press release contains both historical and forward-looking statements about ABM Industries Incorporated ("ABM") and its subsidiaries (collectively referred to as "ABM," "we," "us," "our," or the "Company"). We make forward-looking statements related to future expectations, estimates and projections that are uncertain, and often contain words such as "anticipate," "believe," "could," "estimate," "expect," "forecast, ...

Revenue Performance - Revenue for Q4 2024 was $2.2 billion, reflecting a 4.0% increase year-over-year, with 3.2% organic growth[1][4] - Full fiscal 2024 revenue totaled $8.4 billion, up 3.2% from the previous year, driven by double-digit growth in Technical Solutions and Aviation[1][8] - Revenues for the three months ended October 31, 2024, were $2,177.3 million, representing a 4.0% increase compared to $2,092.9 million in 2023[33] - For the fiscal year ended October 31, 2024, total revenues were $8,359.4 million, a 3.2% increase from $8,096.4 million in 2023[37] - The Aviation segment saw a revenue increase of 11.4% to $276.5 million, while the Technical Solutions segment grew by 34.9% to $257.4 million[45] Profitability and Loss - Net loss for Q4 2024 was $11.7 million, translating to a loss of $0.19 per share, primarily due to a $59.7 million adjustment related to the RavenVolt acquisition[1][5] - Operating profit decreased significantly by 81.9% to $19.2 million in Q4 2024 from $106.4 million in Q4 2023[33] - Net loss for the three months ended October 31, 2024, was $11.7 million, compared to a net income of $62.8 million in the same period of 2023, marking a 118.7% decline[33] - The net income for the year ended October 31, 2024, was $81.4 million, a decrease of 67.6% from $251.3 million in 2023[49] Adjusted Metrics - Adjusted EBITDA for Q4 2024 was $128.0 million, with an adjusted EBITDA margin of 6.1%[1][6] - Adjusted EPS for fiscal 2024 was $3.57, slightly up from $3.50 in fiscal 2023[1][11] - Adjusted net income for the three months ended October 31, 2024, was $57.5 million, down from $66.2 million in the prior year[52] - Adjusted EBITDA for the three months ended October 31, 2024, was $128.0 million, compared to $144.2 million in the prior year[52] Cash Flow and Capital Management - Net cash provided by operating activities was $30.3 million, with free cash flow at $15.5 million, both down significantly from the prior year[1][7] - Free cash flow for the three months ended October 31, 2024, was $15.5 million, significantly lower than $121.2 million in the same period of 2023[56] - The company repurchased $32.0 million of common stock in Q4 2024, totaling $55.8 million for the full fiscal year[1][14] Expenses and Liabilities - Operating expenses for the fiscal year 2024 were $7,325.9 million, up 4.1% from $7,037.6 million in 2023[37] - The company reported a significant increase in selling, general and administrative expenses, which rose by 48.2% to $239.0 million in Q4 2024 from $161.3 million in Q4 2023[33] - The company experienced a 33.6% increase in selling, general and administrative expenses for the fiscal year 2024, totaling $765.3 million compared to $572.8 million in 2023[37] - Total indebtedness at the end of Q4 2024 was $1.4126 billion, with a leverage ratio of 2.6x[1][13] Future Outlook - For fiscal 2025, the company expects adjusted EPS in the range of $3.60 to $3.80 and an adjusted EBITDA margin of 6.3% to 6.5%[1][16] - The company raised its quarterly dividend by 18%, now set at $0.265 per share, marking the 57th consecutive year of dividend increases[1][15] - The company expects to continue focusing on transformation initiatives and integration costs related to acquisitions in the upcoming quarters[57]

Revenue of $2.2 billion in the fourth quarter, including 3.2% organic growth Net loss of $11.7 million and GAAP loss per share of $0.19 in the fourth quarter, largely reflecting a $59.7 million adjustment to the RavenVolt acquisition cash earn-out Adjusted EBITDA of $128.0 million in the fourth quarter Adjusted EPS of $0.90 in the fourth quarterRepurchased $32.0 million of common stock in the fourth quarter and $55.8 million for full fiscal 2024Raises quarterly dividend 18%, as previously announcedFiscal 20 ...