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Jones Lang LaSalle (JLL) Tops Q3 Earnings, Revenue Estimates

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Jones Lang LaSalle Inc. (JLL - Free Report) — popularly known as JLL — reported third-quarter 2017 adjusted earnings of $1.96 per share, beating the Zacks Consensus Estimate of $1.55. The bottom line also compared favorably with the year-ago adjusted earnings of $1.42 per share.

Revenues came in at $1.95 billion, surpassing the Zacks Consensus Estimate of $1.85 billion. The figure was up 14% year over year. Fee revenues were up 12% year over year to $1.62 billion.

Results highlight robust organic growth and strong cash flows from operations. The company experienced Real Estate Services and LaSalle revenue growth that was mainly organic. Moreover, the company could achieve improvement in margin across all segments. Also, accretive organic and M&A contributions, as well as LaSalle incentive fees contributed to the growth.

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 4.1% to $138.97 during regular trading session on Nov 6.

Behind the Headline Numbers

During the third quarter, JLL’s Real Estate Services (RES) revenues climbed 14% year over year to $1.8 billion. In the Americas, total revenues and fee revenues came in at $796.7 million and $749.2 million, indicating 3% and 5% year-over-year growth, respectively. 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 $635.2 million and $463.6 million, up 22% and 23%, respectively, 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 $413.0 million and $309.7 million, marking a jump of 25% and 14% 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 and Japan.
 
Revenues from the LaSalle Investment Management segment climbed 27% year over year to $102.1 million. Incentive fees earned on opportunistic dispositions of real estate assets on behalf of clients in Asia Pacific attributed to this upswing. At the end of the third quarter, assets under management were $59.0 billion, up 2% from $57.6 billion recorded at the end of the prior quarter.

Liquidity

Jones Lang exited the reported quarter with cash and cash equivalents of $277.9 million, up from $258.5 million as of Dec 31, 2016. At the end of third-quarter 2017, the company’s net debt totaled $1.0 billion, down $254.1 million from the prior-quarter end. This reflects a significant improvement in the company’s working capital management.

Dividend

JLL’s board of directors announced a dividend of 37 cents per share. The semi-annual dividend marked a 5.7% increase from the previous payout of 35 cents per share. The new dividend will be paid on Dec 15 to shareholders of record at the close of business on Nov 16, 2017. Notably, total dividends of 72 cents per share announced for 2017 denotes raise 13% jump over dividends paid in 2016.

Our Viewpoint

JLL’s better-than-expected performance in third-quarter 2017 is impressive. 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). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Stocks to Consider

Investors interested in the real estate industry can also consider other stocks like FirstService Corporation (FSV - Free Report) , HFF, Inc. (HF - Free Report) and CBRE Group Inc. . While FirstService Corporation sports a Zacks Rank #1, HFF Inc. and CBRE Group carry a Zacks Rank #2.

The 2017 Zacks Consensus Estimate for FirstService Corporation is pegged at $1.99, denoting 1% increase in a month’s time.

The Zacks Consensus Estimate for full-year 2017 earnings of HFF Inc. moved up 3.5% to $2.36 in a week’s time.

The 2017 earnings estimate for CBRE Group is pegged at $2.59, indicating rise of 1.2% in a week’s time.   


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