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Category: Stock Market and ABM Industries
Date: 6 September 2019 Stock Price: $37.37 We take a look at the 3rd quarter earnings for their 2019 fiscal year of ABM Industries the facility solutions group. Based on their earnings release what are their stock worth?
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About ABM Industries
ABM (NYSE: ABM) is a leading provider of facility solutions with revenues of approximately $6.4 billion and approximately 140,000 employees in 350+ offices throughout the United States and various international locations. ABM's comprehensive capabilities include janitorial, electrical & lighting, energy solutions, facilities engineering, HVAC & mechanical, landscape & turf, mission critical solutions and parking, provided through stand-alone or integrated solutions. ABM provides custom facility solutions in urban, suburban and rural areas to properties of all sizes - from schools and commercial buildings to hospitals, data centers, manufacturing plants and airports. ABM Industries Incorporated, which operates through its subsidiaries, was founded in 1909. For more information, visit www.abm.com.
The image below shows some of the core services that ABM Industries provide as well as the industries they provide it to.
The image below shows some of the core services that ABM Industries provide as well as the industries they provide it to.
Financial overview of ABM's latest earnings report
The numbers we are interested in (for the quarter):
- Revenues: $1.647 billion (up from $1.624 billion from the same quarter of the previous year)
- Operating expenses : $1.454 billion (up from $1.446 billion for the same quarter of the previous year)
- Net income: $36.8 million (up from from $33.6 million for the same quarter of the previous year)
- Diluted net income per share: $0.55 (up from $0.51 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 67 million (down from 66.3 million for the same quarter of the previous year)
- PE ratio: 16.9 (based on the earnings for this quarter being repeated for a full year)
- Dividend declared this quarter: $0.18 (up from $0.175 declared for the same quarter of the previous year)
- Dividend yield: 1.92% (assuming the same dividend that was declared this quarter is declared for every quarter of the fiscal year)
- Cash and cash equivalents: $60.5 million
- Cash and cash equivalents per share: $0.9
- Cash and cash equivalents makes up 2.4% of ABM's current market capital
- Cash and cash equivalents makes up 1.6% of ABM's total assets
- Trade and receivables: $1.061 billion (up from $1.014 billion for the same quarter of the previous year)
- Trade and receivables makes up 28.11% of ABM's total assets
- Trade and receivables grew by 4.6% over the last 12 months
- Cash generated from operations: $57.6 million
- Cash generated from operations per share: $0.85
- Total shareholders' equity of ABM Industries: $1.503 billion
- Shareholders' equity per share: $22.43
ABM's management commentary on the results and earnings guidance
NEW YORK, Sept. 05, 2019 (GLOBE NEWSWIRE) -- ABM (NYSE: ABM), a leading provider of facility solutions, today announced financial results for the third quarter of fiscal 2019.
Scott Salmirs, President and Chief Executive Officer of ABM Industries, commented, "The third quarter represented another period of consistently solid execution from our teams. These results demonstrate our ongoing commitment to manage our business strategically and profitably."
Mr. Salmirs continued, "I am proud of our teams for continuing to navigate the unchanging challenges in the current labor environment. Process improvements and investments in people and systems, have enabled us to mitigate the pressures we have experienced all year due to the tight labor market. IT implementations continue to advance across the organization as part of our ongoing infrastructure improvement plans. Additionally, despite an increase in working capital during the quarter, we continued to make sequential progress against our leverage."
Guidance
The Company is reaffirming its outlook for fiscal 2019. As previously announced, the Company expects GAAP income from continuing operations of $1.70 to $1.80 per diluted share. Excluding items impacting comparability, adjusted income from continuing operations is expected to be in the range of $1.95 to $2.05 per diluted share for the 2019 fiscal year. With the exception of the 2019 Work Opportunity Tax Credits and anticipated excess tax benefits on stock-based awards (ASU 2016-09), this guidance does not include any potential benefits associated with certain other discrete tax items and other unrecognized tax benefits.
On November 1, 2018, the Company adopted the Financial Accounting Standards Board’s new revenue recognition standards, ASC 853 and ASC 606, using the modified retrospective approach with a cumulative- effect adjustment to retained earnings as of the beginning of fiscal 2019. The year-to-date impact primarily reflects the deferral of sales commission costs related to strong year-to-date growth within the Company's Technical Solutions segment. The expected full year impact from the new accounting standards are reflected in the current guidance outlook.
Mr. Salmirs concluded, "We are working diligently to achieve our full year targets. Looking to 2020, we intend to adhere to our disciplined pricing model while closely monitoring the macroeconomic environment. Our focus will also remain on people, processes and systems to build upon the foundation we established in 2019 as part of our long term transformation."
Declaration of cash dividend
The Company also announced that the Board of Directors has declared a cash dividend of $0.18 per common share payable on November 4, 2019 to shareholders of record on October 3, 2019. This will be the Company's 214th consecutive quarterly cash dividend.
Scott Salmirs, President and Chief Executive Officer of ABM Industries, commented, "The third quarter represented another period of consistently solid execution from our teams. These results demonstrate our ongoing commitment to manage our business strategically and profitably."
Mr. Salmirs continued, "I am proud of our teams for continuing to navigate the unchanging challenges in the current labor environment. Process improvements and investments in people and systems, have enabled us to mitigate the pressures we have experienced all year due to the tight labor market. IT implementations continue to advance across the organization as part of our ongoing infrastructure improvement plans. Additionally, despite an increase in working capital during the quarter, we continued to make sequential progress against our leverage."
Guidance
The Company is reaffirming its outlook for fiscal 2019. As previously announced, the Company expects GAAP income from continuing operations of $1.70 to $1.80 per diluted share. Excluding items impacting comparability, adjusted income from continuing operations is expected to be in the range of $1.95 to $2.05 per diluted share for the 2019 fiscal year. With the exception of the 2019 Work Opportunity Tax Credits and anticipated excess tax benefits on stock-based awards (ASU 2016-09), this guidance does not include any potential benefits associated with certain other discrete tax items and other unrecognized tax benefits.
On November 1, 2018, the Company adopted the Financial Accounting Standards Board’s new revenue recognition standards, ASC 853 and ASC 606, using the modified retrospective approach with a cumulative- effect adjustment to retained earnings as of the beginning of fiscal 2019. The year-to-date impact primarily reflects the deferral of sales commission costs related to strong year-to-date growth within the Company's Technical Solutions segment. The expected full year impact from the new accounting standards are reflected in the current guidance outlook.
Mr. Salmirs concluded, "We are working diligently to achieve our full year targets. Looking to 2020, we intend to adhere to our disciplined pricing model while closely monitoring the macroeconomic environment. Our focus will also remain on people, processes and systems to build upon the foundation we established in 2019 as part of our long term transformation."
Declaration of cash dividend
The Company also announced that the Board of Directors has declared a cash dividend of $0.18 per common share payable on November 4, 2019 to shareholders of record on October 3, 2019. This will be the Company's 214th consecutive quarterly cash dividend.
ABM (NYSE: ABM) stock price history
The image below, obtained from Google, shows the stock price history of ABM for the last 5 years. And as the image shows its been a a volatile but largely positive ride for ABM stockholders. With the stock trading around $27.70, 5 years ago to the current $37.37. The return provided over the last 5 years amounting to close to 35%. While not as strong as some of the other stocks we recently did valuations on, it is nothing to be snuffed at. The stock is trading closer to its 52 week high than it is to its 52 week low which is a clear indication that short term sentiment towards the stock being positive.
Recent coverage of ABM
The extract below was obtained from Yahoo Finance which they obtained from Zacks equity research. So Credit to Zacks equity research
ABM Industries (ABM) came out with quarterly earnings of $0.60 per share, beating the Zacks Consensus Estimate of $0.58 per share. This compares to earnings of $0.57 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 3.45%. 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 $0.41 per share when it actually produced earnings of $0.47, delivering a surprise of 14.63%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
ABM Industries, which belongs to the Zacks Building Products - Maintenance Service industry, posted revenues of $1.65 billion for the quarter ended July 2019, missing the Zacks Consensus Estimate by 0.07%. This compares to year-ago revenues of $1.62 billion. The company has topped consensus revenue estimates just once over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
ABM Industries shares have added about 14.1% since the beginning of the year versus the S&P 500's gain of 17.2%.
Read the original article here
ABM Industries (ABM) came out with quarterly earnings of $0.60 per share, beating the Zacks Consensus Estimate of $0.58 per share. This compares to earnings of $0.57 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 3.45%. 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 $0.41 per share when it actually produced earnings of $0.47, delivering a surprise of 14.63%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
ABM Industries, which belongs to the Zacks Building Products - Maintenance Service industry, posted revenues of $1.65 billion for the quarter ended July 2019, missing the Zacks Consensus Estimate by 0.07%. This compares to year-ago revenues of $1.62 billion. The company has topped consensus revenue estimates just once over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
ABM Industries shares have added about 14.1% since the beginning of the year versus the S&P 500's gain of 17.2%.
Read the original article here
ABM Industries (NYSE: ABM) latest stock valuation
Based on the latest earnings report by ABM industries our valuation models set a target price (full value price) for ABM Industries at $37.30. We therefore believe the stock is fully priced right at our target price. We would not recommend long term fundamental or value investors by into ABM industries at its current price. We suggest looking to buy at at least 10% below our target (full value price) of $37.30, so we would suggest looking to buy ABM Industries at a price around $33.50 a stock.