What Happened?
Shares of facility services provider ABM Industries (NYSE: ABM) fell 3% in the afternoon session after the stock continued to decline as the company reported fiscal third-quarter earnings that missed analyst expectations and narrowed its full-year profit outlook.
The facility services provider posted an adjusted earnings per share of $0.82, which fell short of the consensus estimate of $0.95. While revenue of $2.22 billion beat expectations, the earnings miss prompted investor concern. The company attributed the shortfall to margin pressure and higher interest and tax expenses. Looking ahead, ABM narrowed its fiscal 2025 guidance, now anticipating adjusted EPS to be "toward the lower end" of its previously stated $3.65 to $3.80 range. Adding to the negative sentiment, Baird analyst Andrew Wittmann downgraded the stock from Outperform to Neutral following the results.
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What Is The Market Telling Us
ABM’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 4.6% on the news that the company reported second-quarter results that missed Wall Street's earnings expectations, and its full-year forecast fell short of analyst estimates. While the facility services provider posted revenue of $2.22 billion, beating analyst forecasts, its profitability fell short. ABM's adjusted earnings per share came in at $0.82, missing the average Wall Street estimate of $0.95. Looking ahead, the company reiterated its full-year adjusted EPS guidance, but the outlook disappointed investors by falling slightly short of Wall Street's expectations. This combination of an earnings miss and an underwhelming forecast signaled potential challenges ahead, overshadowing the stronger-than-expected sales.
ABM is down 8.4% since the beginning of the year, and at $46.81 per share, it is trading 20.1% below its 52-week high of $58.61 from November 2024. Investors who bought $1,000 worth of ABM’s shares 5 years ago would now be looking at an investment worth $1,277.
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