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Jones Lang LaSalle (JLL) Tops Q4 Earnings, Revenue Estimates

Zacks Equity Research

Jones Lang LaSalle Inc. JLL — popularly known as JLL — reported fourth-quarter 2017 adjusted earnings of $4.92 per share, beating the Zacks Consensus Estimate of $4.30. The bottom line also compared favorably with the year-ago adjusted earnings of $3.95 per share.

For full-year 2017, the company reported adjusted EPS of $9.16, up from $8.13, recorded in 2016. Also, the figure surpassed the Zacks Consensus Estimate of $8.57.

Revenues for the quarter came in at $2.54 billion, surpassing the Zacks Consensus Estimate of $2.33 billion. The figure was up 17% year over year. Fee revenues were up 18% year over year to $2.18 billion. For 2017, revenues were $7.93 billion, up 17% year over year. Also, it surpassed the Zacks Consensus Estimate of $7.73 billion.

Results highlight a robust organic growth and strong cash flows from operations. The company experienced Real Estate Services revenue growth that was mainly organic. Moreover, the company could achieve improvement in margin across Americas, Asia Pacific and LaSalle.

Jones Lang LaSalle Incorporated Price, Consensus and EPS Surprise
 

Jones Lang LaSalle Incorporated Price, Consensus and EPS Surprise | Jones Lang LaSalle Incorporated Quote

Reflecting positive sentiments, shares of JLL climbed 3.2% to $151.21 during the regular trading session on Feb 7.

Behind the Headline Numbers

During the fourth quarter, JLL’s Real Estate Services (RES) revenues climbed 19% year over year to $2.4 billion. In the Americas, total revenues and fee revenues came in at $1 billion and $992.9 million, indicating 17% year-over-year growth for both. Results were driven by Advisory, Consulting and Other, with contributions from Technology Solutions and the recently acquired U.S. valuations platform. Leasing was also strong amid favorable market conditions.

Total revenues and fee revenues of the EMEA segment were $858.9 million and $669.6 million, both up 22% from the year-ago period. This was backed by growth across all service lines.

For Asia Pacific, total revenues and fee revenues came in at $541.2 million and $424.2 million, marking a jump of 24% and 21% from last year. Robust performance in Capital Markets & Hotels, and Property & Facility Management attributed to this growth. This upswing was driven by improvement recorded in Australia, Greater China, Japan and India.
 
Revenues from the LaSalle Investment Management segment declined 8% year over year to $92.9 million. Lower incentive fees, along with a decline in transaction fees & other, led to the fall. At the end of the fourth quarter, assets under management were $58.1 billion, down from $59.0 billion recorded at the end of the prior quarter.

Liquidity

Jones Lang exited the reported quarter with cash and cash equivalents of $268 million, up from $258.5 million as of Dec 31, 2016. At the end of fourth-quarter 2017, the company’s net debt totaled $586.2 million, down $426.6 million from the prior-quarter end. This reflects a significant improvement in the company’s working capital management.

Our Viewpoint

The company’s diversified product and services range is anticipated to help it register solid revenue growth across its operating markets going forward. In addition to this, JLL’s strategic investment activities in order to capitalize on market consolidations are projected to drive growth. Also, armed with a solid balance sheet and healthy debt position, the company remains well poised to retain its growth momentum.

Currently, JLL carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

A few other stocks worth considering are A V Homes, Inc. AVHI, HFF, Inc. HF and Invitation Home Inc. INVH. While A V Homes sports a Zacks Rank #1 (Strong Buy), HFF and Invitation Home carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The 2017 Zacks Consensus Estimate for A V Homes is pegged at 48 cents, stable over the last 30 days.

The Zacks Consensus Estimate for full-year 2017 earnings of HFF moved up marginally to $2.37 in the last 30 days.

The 2017 earnings estimate for Invitation Home is pegged at $1.04, which has remained stable over the last 30 days.

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