ABM Q2 Profit Down, Backs FY Outlook - Update

(RTTNews) - Facility services provider ABM Industries Inc. (ABM), Tuesday reported a 21 percent decline in profit for the second quarter despite revenue growth, as the bottom line was negatively impacted by higher legal expenses, start-up costs and unfavorable weather.

New York-based ABM Industries' second-quarter profit dropped to $15.2 million or $0.27 per share from $19.3 million or $0.35 per share for the year-ago quarter.

Excluding one-time items, adjusted earnings for the second quarter was $18.8 million or $0.33 per share, down from $20.2 million or $0.36 per share in the prior year quarter. Analysts polled by Thomson Reuters expected earnings of $0.40 per share for the second quarter. Analysts' estimates typically exclude special items

Chief Executive Henrik Slipsager said, "Operating profits from the new business, as well as savings realized from the realignment of our infrastructure and operations, were offset by greater than anticipated legal expenses, start-up costs, and the impact of unfavorable weather."

Revenue for the second quarter rose 4.9 percent to $1.23 billion from $1.17 billion a year ago. Analysts had a consensus revenue estimate of $1.23 billion for the quarter.

Revenue growth largely reflects organic growth of 4.1 percent. Janitorial segment achieved organic growth of 3.1 percent, while Building & Energy Solutions and Other segments delivered organic growth of 21.0 percent and 5.9 percent, respectively, on newly awarded contracts.

Henrik Slipsager said, "Our top-line momentum continued to accelerate as we achieved a 4.9 percent increase in revenue, driven primarily by new business in our Onsite and BES groups."

The company also declared a third-quarter cash dividend of $0.155 per share, payable on August 4 to stockholders of record on July 3.

Looking forward, the company reaffirmed its full-year 2014 guidance earnings in the range of $1.38 to $1.48 per share and adjusted earnings of $1.58 to $1.68 per share. Analysts currently estimate earnings of $1.64 per share for the year.

ABM closed Tuesday's trading at $26.89, down $0.49 or 1.79%, on a volume of 227 thousand shares, on the NYSE.