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CBRE Group (CBRE) Q1 Earnings Beat Estimates, Revenues Rise Y/Y
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CBRE Group Inc. (CBRE - Free Report) reported first-quarter 2022 core earnings per share of $1.39, beating the Zacks Consensus Estimate of $1.10 and improving from the year-ago tally of 81 cents.
The quarterly results reflect the benefits of diversifying across asset types, business lines, client types and geographies as well as expanding the company’s resilient business in recent years.
CBRE Group generated revenues of $7.3 billion, up 23.5% year over year. However, revenues compared unfavorably with the Zacks Consensus Estimate of $7.7 billion. Net revenues jumped 30.3% (32.5% in local currency) year over year to $4.4 billion. Core EBITDA surged 56.5% (59.3% in local currency) to $732 million.
In the first quarter of 2022, CBRE completed three in-fill acquisitions for a total of $25.9 million in cash and deferred consideration. These included a project management firm in Spain and Portugal and retail advisory and regional property agencies in the United Kingdom.
Quarter in Detail
CBRE Group’s Advisory Services segment reported a year-over-year revenue increase of 31.6% (33.9% in local currency) to $2.2 billion. Results highlight revenue growth in the United States and worldwide. The operating profit came in at $466 million, up 40.0% (42.3% in local currency) from the year-ago period.
For Property Sales, global revenues surged 58% (62% in local currency) and were up 44% from the pre-pandemic first-quarter peak in 2020. For Property Leasing, global revenues increased 49% (50% in local currency) and were 20% more than the pre-pandemic first-quarter peak in 2019.
The Global Workplace Solutions (GWS) segment registered a year-over-year increase of 19.4% (21.2% in local currency) in revenues to $4.8 billion. Exclusive of $312.1 million of revenues from Turner & Townsend, GWS revenues increased 12% (13% in local currency). The operating profit increased 33.2% (36.0% in local currency) to $203 million. CBRE Group noted that the new business revenue pipeline is at a record level, with a diversified mix of financial services, defense, automotive, retail and logistics prospects.
The Real Estate Investments segment recorded a 34.4% (37.6% in local currency) jump in revenues to $284 million from the year-ago quarter. The operating profit increased to $167 million from the $63 million reported a year ago.
At the end of the first quarter of 2022, assets under management (AUM) reached a record high for the company and aggregated $146.8 billion, up by $4.9 billion from the 2021 year-end. This increase reflects strong net capital inflows and higher asset valuations, partly muted by the unfavorable foreign currency movement. More than 80% of the AUM is invested in assets other than the office.
Balance Sheet Position
CBRE Group exited the first quarter of 2022 with cash and cash equivalents of $1.6 billion, down from $2.4 billion as of Dec 31, 2021.
As of Mar 31, 2022, the company had $4.6 billion in total liquidity. This comprised $1.5 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 0.08 as of the same date. This is significantly less than CBRE’s primary debt covenant of 4.25X.
During the December-end quarter, the company repurchased 4.2 million shares at an average price of $93.54, spending around $390.8 million. As of May 3, 2022, it had $1.35 billion of stock-repurchase capacity remaining under its authorized buyback program.
It’s time to look forward to two stocks from the real estate industry: Jones Lang LaSalle Incorporated (JLL - Free Report) and The Howard Hughes Corporation .
Both Jones Lang LaSalle and The Howard Hughes Corporation are slated to release first-quarter 2022 results on May 9. Currently, JLL and HHC each carry a Zacks Rank of 3.
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CBRE Group (CBRE) Q1 Earnings Beat Estimates, Revenues Rise Y/Y
CBRE Group Inc. (CBRE - Free Report) reported first-quarter 2022 core earnings per share of $1.39, beating the Zacks Consensus Estimate of $1.10 and improving from the year-ago tally of 81 cents.
The quarterly results reflect the benefits of diversifying across asset types, business lines, client types and geographies as well as expanding the company’s resilient business in recent years.
CBRE Group generated revenues of $7.3 billion, up 23.5% year over year. However, revenues compared unfavorably with the Zacks Consensus Estimate of $7.7 billion. Net revenues jumped 30.3% (32.5% in local currency) year over year to $4.4 billion. Core EBITDA surged 56.5% (59.3% in local currency) to $732 million.
In the first quarter of 2022, CBRE completed three in-fill acquisitions for a total of $25.9 million in cash and deferred consideration. These included a project management firm in Spain and Portugal and retail advisory and regional property agencies in the United Kingdom.
Quarter in Detail
CBRE Group’s Advisory Services segment reported a year-over-year revenue increase of 31.6% (33.9% in local currency) to $2.2 billion. Results highlight revenue growth in the United States and worldwide. The operating profit came in at $466 million, up 40.0% (42.3% in local currency) from the year-ago period.
For Property Sales, global revenues surged 58% (62% in local currency) and were up 44% from the pre-pandemic first-quarter peak in 2020. For Property Leasing, global revenues increased 49% (50% in local currency) and were 20% more than the pre-pandemic first-quarter peak in 2019.
The Global Workplace Solutions (GWS) segment registered a year-over-year increase of 19.4% (21.2% in local currency) in revenues to $4.8 billion. Exclusive of $312.1 million of revenues from Turner & Townsend, GWS revenues increased 12% (13% in local currency). The operating profit increased 33.2% (36.0% in local currency) to $203 million. CBRE Group noted that the new business revenue pipeline is at a record level, with a diversified mix of financial services, defense, automotive, retail and logistics prospects.
The Real Estate Investments segment recorded a 34.4% (37.6% in local currency) jump in revenues to $284 million from the year-ago quarter. The operating profit increased to $167 million from the $63 million reported a year ago.
At the end of the first quarter of 2022, assets under management (AUM) reached a record high for the company and aggregated $146.8 billion, up by $4.9 billion from the 2021 year-end. This increase reflects strong net capital inflows and higher asset valuations, partly muted by the unfavorable foreign currency movement. More than 80% of the AUM is invested in assets other than the office.
Balance Sheet Position
CBRE Group exited the first quarter of 2022 with cash and cash equivalents of $1.6 billion, down from $2.4 billion as of Dec 31, 2021.
As of Mar 31, 2022, the company had $4.6 billion in total liquidity. This comprised $1.5 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 0.08 as of the same date. This is significantly less than CBRE’s primary debt covenant of 4.25X.
During the December-end quarter, the company repurchased 4.2 million shares at an average price of $93.54, spending around $390.8 million. As of May 3, 2022, it had $1.35 billion of stock-repurchase capacity remaining under its authorized buyback program.
Currently, CBRE Group 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-eps-surprise-chart | CBRE Group, Inc. Quote
Upcoming Releases
It’s time to look forward to two stocks from the real estate industry: Jones Lang LaSalle Incorporated (JLL - Free Report) and The Howard Hughes Corporation .
Both Jones Lang LaSalle and The Howard Hughes Corporation are slated to release first-quarter 2022 results on May 9. Currently, JLL and HHC each carry a Zacks Rank of 3.