ABM Industries Tightens Full-Year Earnings Outlook; Quarterly Profit Tops Views
ABM Industries (ABM) tightened its full-year earnings outlook on Tuesday as the facility services provider's bottom line for the fiscal third quarter topped market estimates, while revenue matched expectations.The company now anticipates adjusted earnings to be in a range of $3.95 to $4.10 per share for fiscal 2026, compared with its previous guidance of $3.85 to $4.15. The current consensus on FactSet is for non-GAAP EPS of $3.98."We are raising the midpoint of our adjusted EPS outlook and increasing our expectations for full year free cash flow based on our strong third quarter results, and are confident in our ability to achieve it," Chief Executive Scott Salmirs said in a statement. Free cash flow is now expected to come in at $210 million, up about $25 million from the prior guidance.ABM continues to project revenue to rise toward the top end of its previously issued growth forecast of 4% to 5%, while the Street is looking for an increase of 5.4%. On an organic basis, revenue is still pegged to grow near the high end of a 3% to 4% range.For the three months through July, the firm's adjusted EPS climbed to $1.04 from $0.82, ahead of the average analyst estimate of $1.01. Revenue improved 4.2% to $2.32 billion, including organic growth of 2.1%, meeting the Street's view."Our third-quarter results reflected strong operational and financial performance," according to Salmirs. "Our team executed well and delivered on our expectations despite a backdrop of macro uncertainty and adverse timing of certain projects."Revenue in the business and industry segment declined 2.6% to $1.01 billion. The decline was largely anticipated by the company amid the previously announced exit of a large UK-based client and continued softness on the US West Coast.Manufacturing and distribution sales jumped 18% to $481 million, buoyed by the company's acquisition of WGNstar completed in February, new clients and ongoing expansion in technology markets.In the aviation division, revenue inclined 13% to $328.1 million amid healthy air travel trends, while the education business edged 0.3% higher.Technical solutions revenue was up 4.2%, but below the firm's expectations due to a large client deferring certain projects. "We expect (technical solutions) to ramp sequentially in the fourth quarter as we execute on many of the deferred projects," Salmirs said.Last month, rival Aramark (ARMK) lifted its full-year organic revenue growth outlook following better-than-expected fiscal third-quarter results. In late July, CBRE (CBRE) raised its 2026 core EPS guidance.
