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CBRE Group (CBRE) Q2 Earnings & Revenues Beat Estimates

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CBRE Group Inc. (CBRE - Free Report) reported second-quarter 2021 adjusted earnings per share of $1.36, handily beating the Zacks Consensus Estimate of 78 cents and the year-ago quarter tally of 35 cents.

Quarterly results reflect the benefits from diversifying across asset type, business lines, client type and geography, as well as expanding its resilient business in recent years. Capital market activities drove the Advisory Services segment’s recovery.

The company generated revenues of $6.46 billion, outpacing the Zacks Consensus Estimate of $6.05 billion. The revenue figure also compares favorably with the year-ago quarter’s $5.38 billion. Net revenues jumped 30.9% (25.8% in local currency), year on year, to $3.9 billion.

Adjusted EBITDA surged 168.7% (159.1% local currency) to $718 million.

Bob Sulentic, president & chief executive officer of CBRE noted, “Our growth in the second quarter was strong, even compared with prior peak-year performance in 2019. Adjusted EBITDA grew at a better than 20% compound rate from second-quarter 2019 with strong growth across all three business segments. Each segment experienced significant margin expansion over this period.”

Quarter in Detail

The company’s Advisory Services segment reported a year-over-year revenue increase of 46.9% (41.7% local currency) to $2.1 billion. Operating profit came in at $464 million, significantly up from the year-ago period’s $202 million.

The segment’s rebound was led by capital markets activity. Global property sales revenues jumped a whopping 152% (142% local currency) from the year-ago quarter’s weak levels. Global sales revenues also came in 27% higher than the second-quarter 2019 level. While leasing revenues rose 33% (29% local currency), year on year, the reported figure remained about 18% below the 2019 level.

The Global Workplace Solutions (GWS) segment registered an increase of 8.3% (4.2% in local currency) in revenues to $4.08 billion. Operating profit increased 33.5% (26.8%) to $170 million. Facilities management experienced net revenue improvement of 10% (6% local currency), with solid growth within data centers and local facilities management. Continued rebound in construction activity aided project management and witnessed 15% (11% local currency) net revenue growth.

The Real Estate Investments segment recorded a 50.6% (40.0% in local currency) jump in revenues to $243 million. Operating profit increased significantly to $153 million from the year-ago period’s $25 million, reflecting impressive performance in both development services and investment management.

At the end of second-quarter 2021, assets under management (AUM) reached a record high for the company and aggregated $129.1 billion, underlining growth of $4.6 billion ($4.1 billion local currency) from first-quarter 2021. This highlights higher asset valuations, net capital inflows and favorable foreign-currency movement.

During the June-end quarter, the company acquired an incremental interest in Industrious, bringing its current ownership stake to 40%. In addition, it acquired a technical facilities services firm based in Denmark, an infrastructure and development services firm based in Australia, and a gaming sector advisory firm based in Las Vegas.

Balance Sheet Position

CBRE Group exited second-quarter 2021 with cash and cash equivalents of $2.14 billion, up from $1.9 billion as of Dec 31, 2020.

As of Jun 30, 2021, the company had $4.8 billion of total liquidity. This comprised $2 billion in cash, in addition to the ability to borrow a total of $2.8 billion under its revolving credit facilities, net of any outstanding letters of credit. The company’s net leverage ratio was 0.07x as of the same date. This is significantly below CBRE’s primary debt covenant of 4.25x.

During the June-end quarter, the company repurchased $24.1 million of its stock. As of Jun 30, 2021, it had $261.7 million of stock-repurchase capacity.

Currently, CBRE Group flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CBRE Group, Inc. Price, Consensus and EPS Surprise

CBRE Group, Inc. Price, Consensus and EPS Surprise

CBRE Group, Inc. price-consensus-eps-surprise-chart | CBRE Group, Inc. Quote

We, now, look forward to the earnings results of other companies in the real estate sector like Jones Lang LaSalle Incorporated (JLL - Free Report) , Newmark Group, Inc. (NMRK - Free Report) and The RMR Group Inc. (RMR - Free Report) , which are slated to be out next week.

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