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Why AMB Industries' Shares Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of facilities management company ABM Industries (NYSE: ABM  ) fell 10% today after reporting disappointing earnings.

So what: The company reported a tiny increase in revenue to $1.08 billion and a 54.9% decline in revenue to $12.6 million, or an adjusted $0.37 per share. Analysts had expected $0.42 per share in earnings and, to top off the disappointment, management lowered 2012 adjusted EPS outlook to $1.36-$1.42 per share.

Now what: The company did announce a $50 million share buyback but, considering the direction earnings are headed, I think there might be better uses of the cash. I just can't buy the discount today given the direction of earnings and the anemic revenue growth. The stock is just too high of a price at 13.4 times 2012's earnings.

Interested in more info on ABM Industries? Add it to your watchlist by clicking here.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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Travis Hoium

Travis Hoium has been writing for since July 2010 and covers the solar industry, renewable energy, and gaming stocks among other things.

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