ABM Industries Q1 Profit Declines, But Matches View; Backs 2014 Outlook

(RTTNews) - Facility services provider ABM Industries Inc. (ABM) on Tuesday reported a 2 percent decline in profit for the first quarter from last year, when results were boosted by a tax benefit. However, adjusted earnings per share matched analysts' expectations, while revenues missed their estimates.

The New York-based company's net income for the first quarter were $13.07 million or $0.23 per share, down from $13.38 million or $0.24 per share in the previous-year quarter.

In the year-ago period, the company recognized a greater benefit of $0.06 per share from employment-based tax credits, of which, $0.05 per share was related to retroactive reinstatement of the Work Opportunity Tax Credit or WOTC.

Adjusted net income for the quarter was $14.05 million or $0.25 per share, compared to $14.69 million or $0.26 per share in the year-ago period. On average, eight analysts polled by Thomson Reuters expected the company to earn $0.25 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter grew 4 percent to $1.23 billion from $1.18 billion in the same period last year. Analysts had a consensus revenue estimate of $1.24 billion.

The company attributed the increase in revenues to new business and increased scope of work from existing clients primarily in the Janitorial, Building & Energy Solutions, and Security segments.

The company noted that Janitorial and Security segments achieved organic growth of 4.6 percent and 3.2 percent, respectively, from new business and discretionary tag sales.

The building & energy solutions segment delivered organic growth of 13.6 percent, due primarily to new new commercial service and maintenance contracts and increased government business. Including the government business, the segment recorded growth of 16.0 percent in the quarter as the company continued to sell its bundled energy solutions and also began to record revenue from some of its recent government project awards.

Provision for income taxes in the quarter were $9.65 million, compared to $3.81 million in the preivous-year quarter.

Looking ahead to fiscal 2014, ABM maintained its forecast for earnings in a range of $1.38 to $1.48 per share and adjusted earnings between $1.58 and $1.68 per share. The guidance assumes that Congress will retroactively reenact the Work Opportunity Tax Credit. Analysts currently expect full-year earnings of $1.63 per share.

The company's board of directors declared a second quarter cash dividend of $0.155 per common share payable on May 5, 2014 to stockholders of record on April 3, 2014.

ABM closed Tuesday's regular trading session at $29.43, up $1.20 or 4.25 percent on a volume of 455,881 shares. However, in after-hours, the stock declined $0.63 or 2.14 percent to $28.79.