PORTLAND, Ore. (AP) -- Shares of real estate services company CBRE Group Inc. dropped in Wednesday trading after the company reported that its fourth-quarter revenue fell short of market expectations and it issued a modest full-year forecast.
THE SPARK: CBRE reported Tuesday that its adjusted net income rose to beat analysts' expectations due to stronger revenue from its sales and outsourcing business. The company's quarterly revenue rose 7 percent to $1.76 billion but missed Wall Street's estimate of $1.86 billion, according to FactSet.
It forecast earnings of $1.20 to $1.25 per share for the year; analysts forecast $1.25 per share.
THE BIG PICTURE: CBRE, also known as CB Richard Ellis Group, is a real estate firm that services those that own, lend and invest in commercial real estate. The company said that 2011 was a year of unexpectedly tough operating conditions following several difficult years for the industry, which has been hit hard by the sluggish economy. The company has managed to grow during that time, but some investors remain wary as the real estate market is still in a fragile recovery.
THE ANALYSIS: Not all analysts agreed with the market's reaction. JMP Securities' William Marks maintained a "Market Outperform" rating on the company's shares and a $24 price target. He said that the company still managed to beat earnings expectations and despite the revenue miss, has delivered gains from its development business and cost controls. The company could do well when the cyclical commercial real estate market begins to recover.
SHARE ACTION: CBRE shares fell $1.17, or 6.1 percent, to $18.09 in afternoon trading. They have traded between $12.30 and $29.88 in the past 52 weeks.
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