What led to ABM Industries, Inc. (NYSE: ABM) stock pressure

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ABM Industries, Inc. (NYSE: ABM) stock fell over 3.2% in the pre-market session of December 19th, 2019 (Source: Google finance) after the company posted better than expected earnings for the fourth quarter of FY 19. The company reported the adjusted income from continuing operations for the fourth quarter of fiscal 2019 of $44.7 million as compared to $38.8 million for the fourth quarter of fiscal 2018, which is an increase of 15.2%. ABM has delivered the Net income for the fourth quarter of 2019 of $47.9 million, compared to $9.7 million last year. ABM’s net cash provided by operating activities of continuing operations increased to $148.8 million for the quarter due to better working capital management. The Company has ended the fourth quarter with total debt of $965.8 million, including $149.8 million in standby letters of credit. Total debt to proforma adjusted EBITDA stood at approximately 2.8x. For FY 19, the company has reported the revenue of $6.5 billion & net income of $127.4 million.

ABM in the fourth quarter of FY 19 has reported the adjusted earnings per share of 66 cents, beating the analysts’ estimates for the adjusted earnings per share of 62 cents, according to Zacks Investment Research. The company had reported the revenue of $1.65 billion in the fourth quarter of FY 19, missing the analysts’ estimates for revenue by 0.72%. The revenue growth included the organic growth of 0.6% excluding the adoption of ASC 853 and ASC 606.   Organic revenue growth was on the back of the Technical Solutions segment, which was partially offset by a decline within the Business & Industry and Aviation segments, mainly related to the loss of lower margin contracts. The company posted the Adjusted EBITDA for the fourth quarter of 2019 of $93 million compared to $89.9 million in the fourth quarter of 2018.  Adjusted EBITDA margin for the fourth quarter was 5.6% compared to 5.5% in the fourth quarter of fiscal 2018.

Additionally, ABM has increased the quarterly cash dividend by 2.8% to $0.185 per common share, which will be payable on February 3, 2020 to stockholders of record on January 2, 2020. Further, the company has authorized a $150 million share repurchase program, has replaced the Company’s existing share repurchase program, which it had authorized in 2015.

ABM Industries expects full-year 2020 earnings to be in the range of $1.90 to $2.10 per share.

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