A Look Back at Industrial & Environmental Services Stocks' Q3 Earnings: ABM (NYSE:ABM) Vs The Rest Of The Pack

Looking back on industrial & environmental services stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including ABM (NYSE:ABM) and its peers.

Growing regulatory pressure on environmental compliance and increasing corporate ESG commitments should buoy the sector for years to come. On the other hand, environmental regulations continue to evolve, and this may require costly upgrades, volatility in commodity waste and recycling markets, and labor shortages in industrial services. As for digitization, a theme that is impacting nearly every industry, the increasing use of data, analytics, and automation will give rise to improved efficiency of operations. Conversely, though, the benefits of digitization also come with challenges of integrating new technologies into legacy systems.

The 8 industrial & environmental services stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 3.3% on average since the latest earnings results.

ABM (NYSE:ABM)

With roots dating back to 1909 as a window washing company, ABM Industries (NYSE:ABM) provides integrated facility management, infrastructure, and mobility solutions across various sectors including commercial, manufacturing, education, and aviation.

ABM reported revenues of $2.30 billion, up 5.4% year on year. This print exceeded analysts’ expectations by 1%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EPS estimates and full-year EPS guidance in line with analysts’ estimates.

“ABM finished the year on a high note with record quarterly revenue, supported by 4.8% organic growth. Excluding prior year self-insurance adjustments, fourth quarter adjusted EPS, adjusted EBITDA and adjusted EBITDA margin all exceeded our expectations, reflecting strong volume, favorable mix, and the benefits of our cost discipline and restructuring actions. Our performance was led by exceptional results in Technical Solutions, where the team successfully delivered numerous projects in a complex construction environment. Aviation and Manufacturing & Distribution also posted strong revenue growth, each benefiting from recent client wins and customer expansions, while Business & Industry and Education generated improved margins, demonstrating the resiliency of their end markets and continued focus on operational efficiency," said Scott Salmirs, President and Chief Executive Officer.

Unsurprisingly, the stock is down 9% since reporting and currently trades at $41.64.

Read our full report on ABM here, it’s free for active Edge members.

Best Q3: Tetra Tech (NASDAQ:TTEK)

With a 50-year legacy of "Leading with Science" and operations on all seven continents, Tetra Tech (NASDAQ:TTEK) provides high-end consulting and engineering services focused on water management, environmental solutions, and sustainable infrastructure for government and commercial clients worldwide.

Tetra Tech reported revenues of $1.16 billion, up 1.6% year on year, outperforming analysts’ expectations by 10.7%. The business had a strong quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ revenue estimates.

Tetra Tech pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 6% since reporting. It currently trades at $34.41.

Is now the time to buy Tetra Tech? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Vestis (NYSE:VSTS)

Operating a network of more than 350 facilities with 3,300 delivery routes serving customers weekly, Vestis (NYSE:VSTS) provides uniform rentals, workplace supplies, and facility services to over 300,000 business locations across the United States and Canada.

Vestis reported revenues of $686.2 million, flat year on year, exceeding analysts’ expectations by 2.1%. Still, it was a softer quarter as it posted a significant miss of analysts’ EPS estimates.

As expected, the stock is down 1.1% since the results and currently trades at $6.65.

Read our full analysis of Vestis’s results here.

Cintas (NASDAQ:CTAS)

Starting as a family business collecting and cleaning shop rags in Cincinnati, Cintas (NASDAQ:CTAS) provides corporate identity uniforms, facility services, and safety products to over one million businesses across North America.

Cintas reported revenues of $2.8 billion, up 9.3% year on year. This number topped analysts’ expectations by 1.4%. It was a satisfactory quarter as it also put up a narrow beat of analysts’ revenue estimates.

The stock is up 1.5% since reporting and currently trades at $190.20.

Read our full, actionable report on Cintas here, it’s free for active Edge members.

Pitney Bowes (NYSE:PBI)

With a century-long history dating back to 1920 and processing over 15 billion pieces of mail annually, Pitney Bowes (NYSE:PBI) provides shipping, mailing technology, logistics, and financial services to businesses of all sizes.

Pitney Bowes reported revenues of $459.7 million, down 8% year on year. This print lagged analysts' expectations by 1.7%. Overall, it was a slower quarter as it also logged a miss of analysts’ revenue estimates and EPS in line with analysts’ estimates.

Pitney Bowes scored the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is down 4.4% since reporting and currently trades at $10.72.

Read our full, actionable report on Pitney Bowes here, it’s free for active Edge members.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

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