ABM sees sales recovery in next two quarters

NEW YORK, June 3 (BestGrowthStock) – ABM Industries Inc (ABM.N: )
said it expected higher sales in its next two quarters as the
improving economy boosts demand for its janitorial and other
services, a day after second-quarter sales and earnings missed
Wall Street expectations.

The company, whose results partly reflect office occupancy
rates, also affirmed its 2010 profit forecast.

“I’m hopeful that we’ll see (revenue) growth in the third
quarter, and I feel stronger we’ll have growth in the fourth
quarter,” Chief Executive Officer Henrik Slipsager said on
Thursday on the company’s conference call.

Because ABM has long-term relationships with Fortune 1,000
clients, it is able to see demand several months ahead, Senior
Vice President David Farwell told Reuters.

The company’s shares were up 0.5 percent at $21.92 in
morning trading on the New York Stock Exchange.

Late on Wednesday, ABM said net income fell 33 percent to
$8.6 million, or 16 cents a share, in the second quarter ended
on April 30 from $12.8 million, or 25 cents a share, a year
earlier.

Earnings before one-time items were 23 cents per share, 3
cents below Wall Street estimates.

Sales were flat at $856 million, while analysts had
expected $862 million.

The New York-based company, which also provides
engineering, parking and other services, repeated its earlier
forecast of full-year adjusted earnings of $1.35 to $1.45 per
share from continuing operations, compared with $1.36 expected
by Wall Street.

U.S. office vacancy rates have jumped to nearly 18 percent
in the first quarter from 13 percent at the end of 2007,
according to Grubb & Ellis (GBE.N: ), a commercial real estate
services company. Vacancy rates typically peak along with
unemployment rates, so a labor market recovery should boost
demand for U.S. office space.

Friday’s May employment report is expected to show more
than 500,000 jobs added outside the farm sector, with the
unemployment rate easing to 9.8 percent. [ECI/US]

Investment Tools

(Reporting by Nick Zieminski; Editing by Lisa Von Ahn)

ABM sees sales recovery in next two quarters