ABM Industries Inc. (NYSE: ABM), a leading provider of facility management, engineering, and infrastructure solutions, recently released its fiscal third-quarter 2025 financial results. While revenue saw significant growth—reaching $2.2 billion, a 6.2% increase from the prior year—earning per share fell short of market expectations. The company also provided guidance for the remainder of the fiscal year.
ABM Reports Disappointing Third Quarter
ABM’s adjusted earnings per diluted share (EPS) for the third quarter totaled $0.82, significantly lower than the anticipated $0.95. This downward trend reflects the impact of higher interest and tax expenses despite cost-reduction efforts. Operating cash flow experienced substantial growth, with a 120.1% increase to $175 million, alongside a significant rise in free cash flow to $150.2 million, primarily due to improved cash collection driven by their ERP conversion program. The Board also authorized an increased share repurchase program of $150 million.
Fiscal Year Outlook
Looking forward, ABM anticipates its adjusted EPS for the full fiscal year 2025 will fall at the lower end of its previously projected range of $3.65 to $3.80. This adjustment accounts for anticipated higher interest expense and ongoing challenges in certain markets impacting margins. The company expects an adjusted EBITDA margin ranging from 6.3% to 6.5%. To address near-term margin pressures, ABM is implementing a restructuring program aimed at streamlining operations and enhancing efficiency. This initiative will yield approximately $35 million in annualized cost savings, with benefits beginning in the fourth quarter of 2025 and reaching full run-rate by early fiscal year 2026. The company also focuses on labor efficiency actions and cost controls to mitigate near-term margin challenges.
Strategic Focus
ABM continues to invest in AI capabilities and client-facing solutions to drive future growth and improved margins over time. The company has also been actively repurchasing shares, purchasing over one million shares during July and August, showcasing its confidence in the long-term earnings trajectory and cash-generating capabilities.
Disclaimer
This article was written based on available publicly disclosed information, without the author holding or having a position in any securities discussed. All stock prices were quoted at the time of writing.