Why ABM Industries Stock Popped 17%
ABM Industries (NYSE: ABM) scored its third "earnings beat" in a row this morning, sending shares of the cleaning contractor flying up 17.2% as of 11:50 a.m. EST.
ABM reported a $0.58 per share "adjusted" profit for fiscal Q4 2018, beating analyst predictions of $0.56 pro forma, on sales of $1.65 billion.
Granted, ABM's GAAP profit was only $0.15 per share, but even this was better than the GAAP loss the company had reported in the year-ago quarter. Quarterly sales grew 10% year over year.
If there was a dark cloud around this silver lining, it was the fact that even as ABM exceeded expectations, Q4 marked a distinct slowdown in the pace of business growth this year. For all of 2018, sales grew 18% (or nearly twice as fast as the growth rate recorded in Q4).
That being said, a win is a win, and with earnings for all of 2018 coming in at $1.47 per diluted share (up from just $0.07 last year), 2018 as a whole was definitely a winning year for ABM.
It looks like 2019 could be even better. Issuing new guidance for the new fiscal year, ABM predicted that in fiscal 2019, it will earn between $1.65 and $1.80 per share, GAAP. Taken at the midpoint of that range, ABM's promised $1.72 per share in GAAP profit will represent 17% year-over-year profit growth -- not quite as good as the 2,000% income growth we saw in 2018, but good enough to send ABM stock up 17% today.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.