Aramark shares plummet on disappointing earnings
The disappointing earnings report follows a controversy over Aramark's decision not to pay bonuses to front-ling managers last year and following a suggest by Nomura analysts that an activist should take on the company.
Aramark shares opened sharply lower Tuesday as the Philadelphia food-and business-services giant reported disappointing quarterly earnings.
The shares opened trading on the New York Stock Exchange at $26.02, down more than $5, or 16 percent, from Monday’s close, but quickly pared the loss to $3 per share, or 10 percent.
Operating income was down 9 percent, to $123 million in the quarter ended March 31. That included the $65 million cost of bonuses paid for with a corporate tax refund received thanks to the 2017 Tax Cuts and Jobs Act.
Aramark’s revenue was up just 2 percent, to $4 billion.
The company stoked controversy among thousands of its front-line managers earlier this year when it decided to not pay earned bonuses for the fiscal year ended Sept. 30.