Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at ABM Industries (NYSE:ABM) and its peers.
Many environmental and facility services are non-discretionary (sports stadiums need to be cleaned after events), recurring, and performed through longer-term contracts. This makes for more predictable and stickier revenue streams. Additionally, there has been an increasing focus on emissions and water conservation over the last decade, driving innovation in the sector and demand for new services. Despite these tailwinds, environmental and facility services companies are still at the whim of economic cycles. Interest rates, for example, can greatly impact commercial construction projects that drive incremental demand for these services.
The 13 environmental and facilities services stocks we track reported a slower Q2. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 2% below.
Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation. However, environmental and facilities services stocks have held steady amidst all this with share prices up 2.7% on average since the latest earnings results.
Best Q2: ABM Industries (NYSE:ABM) Started with a $4.50 investment to purchase a bucket, sponge, and mop, ABM (NYSE:ABM) offers janitorial, parking, and facility services.
ABM Industries reported revenues of $2.09 billion, up 3.3% year on year. This print exceeded analysts’ expectations by 2.8%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ organic revenue estimates and a decent beat of analysts’ earnings estimates.
“ABM’s strong third quarter performance is further validation that our strategy is working. 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,” said Scott Salmirs, President & Chief Executive Officer.
The stock is down 7.3% since reporting and currently trades at $51.99.
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BrightView (NYSE:BV) An official field consultant for Major League Baseball, BrightView (NYSE:BV) offers landscaping design, development, and maintenance.
BrightView reported revenues of $738.8 million, down 3.6% year on year, in line with analysts’ expectations. The business had a satisfactory quarter with an impressive beat of analysts’ earnings estimates but a miss of analysts’ Maintenance revenue estimates.
The market seems happy with the results as the stock is up 7.7% since reporting. It currently trades at $15.51.
Weakest Q2: Perma-Fix (NASDAQ:PESI) Tackling hazardous waste challenges since 1990, Perma-Fix (NASDAQ:PESI) provides environmental waste treatment services.
Perma-Fix reported revenues of $13.99 million, down 44.1% year on year, falling short of analysts’ expectations by 12%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.
Perma-Fix delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 10.7% since the results and currently trades at $11.30.
Clean Harbors (NYSE:CLH) Established in 1980, Clean Harbors (NYSE:CLH) provides environmental and industrial services like hazardous and non-hazardous waste disposal and emergency spill cleanups.
Clean Harbors reported revenues of $1.55 billion, up 11.1% year on year. This result beat analysts’ expectations by 1.5%. Overall, it was a very strong quarter as it also put up an impressive beat of analysts’ operating margin estimates and a decent beat of analysts’ earnings estimates.
The stock is up 8.9% since reporting and currently trades at $244.30.
Rollins (NYSE:ROL) Operating under multiple brands like Orkin and HomeTeam Pest Defense, Rollins (NYSE:ROL) provides pest and wildlife control services to residential and commercial customers.
Rollins reported revenues of $891.9 million, up 8.7% year on year. This print met analysts’ expectations. More broadly, it was a mixed quarter as it logged a miss of analysts’ organic revenue estimates.
The stock is up 1.9% since reporting and currently trades at $50.91.
This content was originally published on Stock Story
