What Happened?
Shares of facility services provider ABM Industries (NYSE:ABM) fell 4.6% in the morning session after the company reported second-quarter results that missed Wall Street's earnings expectations, and its full-year forecast fell short of analyst estimates.
While the facility services provider posted revenue of $2.22 billion, beating analyst forecasts, its profitability fell short. ABM's adjusted earnings per share came in at $0.82, missing the average Wall Street estimate of $0.95.
Looking ahead, the company reiterated its full-year adjusted EPS guidance, but the outlook disappointed investors by falling slightly short of Wall Street's expectations. This combination of an earnings miss and an underwhelming forecast signaled potential challenges ahead, overshadowing the stronger-than-expected sales.
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What Is The Market Telling Us
ABM’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 3.6% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
ABM is down 7.1% since the beginning of the year, and at $47.52 per share, it is trading 18.9% below its 52-week high of $58.61 from November 2024. Investors who bought $1,000 worth of ABM’s shares 5 years ago would now be looking at an investment worth $1,296.
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