Why AMB Industries' Shares Dropped (ABM)

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.

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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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