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CBRE (CBG) Q1 Earnings & Revenues Beat Estimates, Up Y/Y

Zacks Equity Research

CBRE Group Inc. CBG reported first-quarter 2017 adjusted earnings per share of 43 cents, beating the Zacks Consensus Estimate of 33 cents. The figure also denoted a 19% increase from the prior-year quarter tally of 36 cents. Results reflect better-than-expected growth in revenues.

On a GAAP basis, earnings per share came in at 38 cents, ahead of the prior-year quarter earnings per share of 24 cents.

The company posted revenues of around $2.98 billion, outpacing the Zacks Consensus Estimate of $2.96 billion. In addition, revenues came higher than the year-ago figure of $2.85 billion.

Fee revenues were up 5% (7% in local currency) year over year to $1.9 billion. Further, excluding contributions from all acquisitions completed after first-quarter 2016, organic fee revenue advanced 4% (6% in local currency).

Quarter in Detail

CBRE Group’s largest business segment – The Americas – reported 7% rise in revenues to $1.7 billion (same in local currency), while Asia Pacific (APAC) witnessed 10% increase in revenues to $341.1 million (9% local currency), with solid growth recorded in Greater China, India and Singapore.

However, revenue growth in Europe, the Middle East & Africa (EMEA) was adversely affected by foreign currency movement, mainly the depreciation of the British pound sterling. As a result, although EMEA revenues rose 9% in local currency, the figure was flat at $844.2 million after conversion to the U.S. dollars.

In the Global Investment Management segment, revenues totaled $89.6 million, down nearly 1% (up 3% in local currency) year over year, while the Development Services segment reported revenues of $13.7 million, declining 19% year over year.

Notably, in the first quarter, the company signed 29 occupier outsourcing contracts in EMEA and APAC (combined), while 16 were signed in the global health care sector.

Liquidity

CBRE exited first-quarter 2017 with cash and cash equivalents of $533.3 million, down from $762.6 million as of Dec 31, 2016.

2017 Outlook

The company did not update the full-year guidance this time.

During its prior-quarter earnings release, the company projected adjusted earnings per share for 2017 in the range of $2.35–$2.45. The Zacks Consensus Estimate for the same is currently pegged at $2.38.

Our Viewpoint

CBRE’s extensive real estate products and services offerings, improving leasing, property sales and outsourcing business, strategic in-fill acquisitions, transformational deals, and healthy balance sheet are anticipated to drive its results. However, uneasiness in certain economies and unfavorable foreign currency movement remain concerns for the company.

CBRE Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
 

CBRE Group, Inc. Price, Consensus and EPS Surprise
 

CBRE Group, Inc. Price, Consensus and EPS Surprise | CBRE Group, Inc. Quote

Better-ranked stocks in the industry include Henderson Land Development Company Limited HLDCY, Landmark Infrastructure Partners LP LMRK and RE/MAX Holdings, Inc. RMAX. All three stocks carry a Zacks Rank #2 (Buy).


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