NEW YORK - ABM Industries (NYSE:ABM), a leading provider of facility solutions, reported a strong start to fiscal year 2024 with first-quarter earnings and revenue that exceeded analyst expectations.
The company announced an adjusted EPS of $0.86 for the quarter, surpassing the analyst estimate of $0.71. Revenue also beat forecasts, coming in at $2.1 billion against the consensus estimate of $2.01 billion, marking a 3.9% increase from the same quarter last year.
Scott Salmirs, President & Chief Executive Officer, attributed the robust performance to organic growth across several segments, including a notable double-digit revenue increase in Aviation and Technical Solutions. "We are particularly pleased with the double-digit revenue growth we posted in our Aviation and Technical Solutions segments, while Manufacturing & Distribution and Education were solid as well," Salmirs stated. He also highlighted the company's strategic investments in services and new markets, such as microgrids, which continue to expand ABM's market opportunities.
The positive results have led ABM to raise its outlook for the full fiscal year 2024 adjusted EPS to a range of $3.30 to $3.45, an increase from the previous guidance of $3.20 to $3.40. This updated guidance reflects the company's strong first-quarter results, which included discrete tax benefits, and the resilience of its Business & Industry segment amid a challenging commercial real estate market.
Despite the positive earnings report, the company did note a 5% decline in adjusted EBITDA to $116.7 million, with adjusted EBITDA margin also contracting to 5.9% from 6.4% last year. This was largely due to higher corporate investments and project mix in Technical Solutions, which were partially offset by cost controls and price increases.
ABM's Board of Directors declared a quarterly cash dividend of $0.225 per common share, marking the company's 232nd consecutive quarterly cash dividend. The dividend is payable on May 6, 2024, to shareholders of record as of April 4, 2024.
As of the end of the first quarter, ABM's total indebtedness stood at $1,410.8 million, with a total leverage ratio of 2.4x. The company also reported available liquidity of $507.8 million, inclusive of cash and cash equivalents of $58.0 million.
The company's financial outlook for the rest of the fiscal year remains unchanged, with adjusted EBITDA margin expected to be between 6.2% and 6.5%, interest expense projected at $82 million to $86 million, and the tax rate, excluding discrete items and non-taxable items, anticipated to be 29% to 30%.
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