09:12 AM EDT, 09/05/2025 (MT Newswires) -- ABM Industries' ( ABM ) fiscal third-quarter earnings unexpectedly declined year over year, while the facility solution provider recorded revenue above market estimates.

The company on Friday posted adjusted earnings of $0.82 a share for the quarter ended July, down from $0.84 the year before and missing the FactSet-polled consensus for an increase to $0.95. Revenue improved 6.2% to $2.22 billion, topping the Street's view for $2.15 billion.

The stock fell 5.4% in the most recent premarket activity.

Some commercial office markets within the firm's business and industry segment, especially in select West Coast, Midwest and Mid-Atlantic metro areas, are "recovering more slowly," Chief Executive Scott Salmirs said in a statement. The company is "utilizing strategic pricing" for contract rebids and "proactive extensions" to position itself for growth in these markets, according to Salmirs.

"We are employing a similar strategy for certain (manufacturing and distribution) new business opportunities within attractive end-markets like semiconductor and e-commerce," Salmirs said. "These decisions modestly pressured margin and adjusted EPS, but are expected to yield meaningful benefits over time."

Revenue in the business and industry segment rose 2.8% to $1.04 billion, while manufacturing and distribution climbed 8.4% to $408.9 million, reflecting new "client wins" and expansions. Aviation sales gained 8.7%, while the technical solutions division advanced 19%. The education business delivered growth of 3%.

ABM Industries ( ABM ) is undertaking measures to tackle short-term challenges to its margins through labor efficiency actions, cost controls and a restructuring program launched in August, according to Salmirs. The company expects the program to save about $35 million in annual costs once fully implemented, with the savings to begin in the fourth quarter and ramp to their full run rate by early fiscal 2026, it said.

"Looking ahead, we expect our fourth quarter adjusted EPS and margin results to improve meaningfully over the third quarter driven by the benefits of these actions, as well as strong performance in our (technical solutions) segment," Salmirs said. The firm estimates roughly $10 million in restructuring charges in the ongoing three-month period.

For fiscal 2025, ABM Industries ( ABM ) anticipates its adjusted EPS to be towards the lower end of its $3.65 to $3.80 range, reflecting higher-than-expected interest expense and margin dynamics. The Street is looking for non-GAAP EPS of $3.75.