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CBRE Group (CBRE) Q3 Earnings & Revenues Beat Estimates
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CBRE Group Inc. (CBRE - Free Report) reported third-quarter 2021 adjusted earnings per share of $1.39, beating the Zacks Consensus Estimate of $1.20 and improving from the year-ago tally of 73 cents.
Quarterly results reflect the benefits of diversifying across asset types, business lines, client types and geographies, as well as expanding its resilient business in recent years.
The company generated revenues of $6.79 billion, outpacing the Zacks Consensus Estimate of $6.7 billion. The revenue figure also compares favorably with the year-ago quarter’s $5.64 billion. Net revenues jumped 28.5% (26.5% in local currency), year over year to $4.17 billion.
Adjusted EBITDA surged 66.6% (64.6% local currency) to $736 million.
Quarter in Detail
The company’s Advisory Services segment reported a year-over-year revenue increase of 48% (46.2% local currency) to $2.4 billion. All business lines exceeded third-quarter 2019 levels. Operating profit came in at $522 million, significantly up from the year-ago period’s $287 million. Apart from solid revenue growth, cost-saving efforts executed last year contributed to more than 80% growth in the segment’s operating profit.
The segment’s rebound was led by capital market activity. Global property sales revenues jumped a whopping 93% (91% local currency) from the year-ago quarter’s weak levels. Global property sales revenues also came in 27% higher than the third-quarter 2019 level. Leasing activity continued to recover with global leasing revenues increasing 58% (57% local currency), year over year, and 7% above the third-quarter 2019 peak level.
The Global Workplace Solutions segment registered an increase of 8.2% (6.5% in local currency) in revenues to $4.2 billion. Operating profit increased 16.5% (14.4%) to $187 million. Facilities management experienced 6% (4% local currency) growth in revenues, with solid strength from local clients. The continued rebound in construction activity aided project management and witnessed 21% (19% local currency) revenue growth.
The Real Estate Investments segment recorded a 32% (27.7% in local currency) jump in revenues to $224 million. Operating profit increased significantly to $146 million from the year-ago period’s $71 million, reflecting impressive performance in both development services and investment management.
At the end of third-quarter 2021, assets under management reached a record high for the company and aggregated $133.1 billion, underlining growth of $4 billion ($5.8 billion local currency) from second-quarter 2021. This highlights higher asset valuations and net capital inflows, partly offset by unfavorable foreign currency movement.
During the September-end quarter, the company made in-fill acquisitions aggregating $21 million in cash and deferred consideration. In July, the company announced signing of an agreement to acquire a 60% ownership stake in Turner & Townsend Holdings Limited for $1.3 billion. An initial payment of roughly $700 million of this amount will be made in early November, when the transaction is anticipated to close.
Balance Sheet Position
CBRE Group exited third-quarter 2021 with cash and cash equivalents of $2.7 billion, up from $1.9 billion as of Dec 31, 2020.
As of Sep 30, 2021, the company had $5.8 billion in total liquidity. This comprised $2.7 billion in cash in addition to the ability to borrow a total of $3.1 billion under its revolving credit facilities, net of any outstanding letters of credit. The company’s net leverage ratio was (0.31X) as of the same date. This is significantly below CBRE’s primary debt covenant of 4.25X.
During the September-end quarter, the company repurchased more than one million shares at an average price of $97.55, spending around $100 million. As of Sep 30, 2021, it had $161.7 million of stock-repurchase capacity.
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 Cushman & Wakefield plc (CWK - Free Report) , which are slated to be out next week.
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CBRE Group (CBRE) Q3 Earnings & Revenues Beat Estimates
CBRE Group Inc. (CBRE - Free Report) reported third-quarter 2021 adjusted earnings per share of $1.39, beating the Zacks Consensus Estimate of $1.20 and improving from the year-ago tally of 73 cents.
Quarterly results reflect the benefits of diversifying across asset types, business lines, client types and geographies, as well as expanding its resilient business in recent years.
The company generated revenues of $6.79 billion, outpacing the Zacks Consensus Estimate of $6.7 billion. The revenue figure also compares favorably with the year-ago quarter’s $5.64 billion. Net revenues jumped 28.5% (26.5% in local currency), year over year to $4.17 billion.
Adjusted EBITDA surged 66.6% (64.6% local currency) to $736 million.
Quarter in Detail
The company’s Advisory Services segment reported a year-over-year revenue increase of 48% (46.2% local currency) to $2.4 billion. All business lines exceeded third-quarter 2019 levels. Operating profit came in at $522 million, significantly up from the year-ago period’s $287 million. Apart from solid revenue growth, cost-saving efforts executed last year contributed to more than 80% growth in the segment’s operating profit.
The segment’s rebound was led by capital market activity. Global property sales revenues jumped a whopping 93% (91% local currency) from the year-ago quarter’s weak levels. Global property sales revenues also came in 27% higher than the third-quarter 2019 level. Leasing activity continued to recover with global leasing revenues increasing 58% (57% local currency), year over year, and 7% above the third-quarter 2019 peak level.
The Global Workplace Solutions segment registered an increase of 8.2% (6.5% in local currency) in revenues to $4.2 billion. Operating profit increased 16.5% (14.4%) to $187 million. Facilities management experienced 6% (4% local currency) growth in revenues, with solid strength from local clients. The continued rebound in construction activity aided project management and witnessed 21% (19% local currency) revenue growth.
The Real Estate Investments segment recorded a 32% (27.7% in local currency) jump in revenues to $224 million. Operating profit increased significantly to $146 million from the year-ago period’s $71 million, reflecting impressive performance in both development services and investment management.
At the end of third-quarter 2021, assets under management reached a record high for the company and aggregated $133.1 billion, underlining growth of $4 billion ($5.8 billion local currency) from second-quarter 2021. This highlights higher asset valuations and net capital inflows, partly offset by unfavorable foreign currency movement.
During the September-end quarter, the company made in-fill acquisitions aggregating $21 million in cash and deferred consideration. In July, the company announced signing of an agreement to acquire a 60% ownership stake in Turner & Townsend Holdings Limited for $1.3 billion. An initial payment of roughly $700 million of this amount will be made in early November, when the transaction is anticipated to close.
Balance Sheet Position
CBRE Group exited third-quarter 2021 with cash and cash equivalents of $2.7 billion, up from $1.9 billion as of Dec 31, 2020.
As of Sep 30, 2021, the company had $5.8 billion in total liquidity. This comprised $2.7 billion in cash in addition to the ability to borrow a total of $3.1 billion under its revolving credit facilities, net of any outstanding letters of credit. The company’s net leverage ratio was (0.31X) as of the same date. This is significantly below CBRE’s primary debt covenant of 4.25X.
During the September-end quarter, the company repurchased more than one million shares at an average price of $97.55, spending around $100 million. As of Sep 30, 2021, it had $161.7 million of stock-repurchase capacity.
Currently, CBRE Group carries a Zacks Rank #2 (Buy). 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-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 Cushman & Wakefield plc (CWK - Free Report) , which are slated to be out next week.