Shares of ABM Industries fell after the company, which provides janitorial and parking services to offices, warned that companies are downsizing office space as many workers stay at home at least some of the time.
The stock fell 14% to $38.70 in Thursday morning trading. This year the shares are down 13%.
“As office leases expire, many clients are downsizing their office footprints given hybrid work models and the macroeconomic environment,” Chief Executive Scott Salmirs told analysts on a conference call. “This puts pressure on the demand side for us until vacant floors are released and occupied.”
The company’s energy unit, which provides electrical services and microgrid systems installation among other offerings, is also getting hit by project delays due to everything from supply-chain problems to permitting issues.
The New York-based company reported a fiscal third-quarter profit of $98.1 million, or $1.47 a share, up from $56.8 million, or 85 cents a share, a year ago. Adjusted earnings of 79 cents a share fell shy of analysts’ expectations for an adjusted profit of 89 cents a share.
Revenue rose 3.4% to $2.03 billion, topping expectations for revenue of $2.01 billion.