Facility services provider ABM Industries Inc. (ABM) on Monday reported a 53 percent increase in profit for the fourth quarter from last year. The increase reflects lower expenses and a one-time tax benefit that helped offset only a slight increase in revenues, which were impacted by sluggish economic conditions and lower government spending.
Nevertheless, both earnings per share and revenue beat analysts' estimates. The company also hiked its quarterly dividend by 3.4 percent. Shares of the company gained more than 2 percent in extended trade.
Looking ahead, the New York-based company said it is not providing guidance for fiscal year 2013 due to the economic and government spending uncertainties relating to the "fiscal cliff". The company anticipates providing guidance in March 2013, when it reports results of its first fiscal quarter.
ABM Industries' fourth-quarter net income rose to $27.66 million or $0.50 per share from $18.05 million or $0.33 per share in the year-ago period.
Adjusted income from continuing operations were $27.66 million or $0.50 per share, up from $20.38 million or $0.37 per share in the year-ago period. The increase in adjusted income from continuing operations is primarily due to a $0.11 per share net benefit from a one-time discrete tax item.
On average, six analysts polled by Thomson Reuters expected the company to earn $0.40 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter edged up only 0.8 percent to $1.09 billion from $1.08 billion in the year-ago period. Analysts had a consensus revenue estimate of $1.08 billion.
Excluding the government business, consolidated revenue for the quarter grew about 2.6 percent.
The effective tax rate for the quarter was 21.8 percent, compared to 41.8 percent in the same period last year. The tax provision for the quarter includes a one-time discrete tax benefit.
Henrik Slipsager, ABM's president and chief executive officer said, "On a year-over-year basis, we generated higher revenues on a consolidated basis as we benefited from new business in Janitorial, Security and Parking. Revenue for Facility Solutions continued to be negatively impacted by diminished sales to the U.S. Government, which decreased 34% year-over-year in the fourth quarter of 2012."
For fiscal year 2012, ABM Industries' net income declined to $62.58 million or $1.14 per share from $68.50 million or $1.27 per share last year.
Adjusted income from continuing operations were $76.12 million or $1.39 per share, compared to $74.96 million or $1.39 per share in the previous year.
Revenues for the year rose 1.3 percent to $4.30 billion from $4.25 billion in the prior year.
Analysts expected the company to earn $1.29 per share for the year on revenues of $4.30 billion.
ABM Industries said its board of directors declared a first-quarter cash dividend of $0.15 per share, representing a 3.4 percent increase from the prior dividend. The dividend is payable on December 28 to stockholders of record on December 21.
ABM closed Monday's regular trading at $19.73, up $0.17 or 0.87 percent on 400,525shares. In after-hours, the stock further gained $0.46 or 2.33 percent to $20.19.
For comments and feedback: editorial@rttnews.com