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CBRE Group (CBRE) Q3 Earnings & Revenues Lag, Stock Down
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CBRE Group Inc.’s (CBRE - Free Report) third-quarter 2022 core earnings per share (EPS) of $1.13 lagged the Zacks Consensus Estimate of $1.24. The figure also declined by 18.7% from the year-ago tally. Reflecting negative sentiments, CBRE shares have declined more than 3%.
The quarterly results reflect lower-than-expected revenues amid the weakening of the macro environment, particularly the deterioration of the capital market environment. This caused both sales and loan originations to fall steeply.
CBRE Group generated revenues of $7.53 billion, which compared unfavorably with the Zacks Consensus Estimate of $7.89 billion. However, revenues were up 10.8% year over year.
Net revenues increased 10.8% (15.7% in local currency) year over year to $4.6 billion. Core EBITDA declined 17.3% (13.0% in local currency) to $606 million.
In the third quarter of 2022, CBRE completed three in-fill acquisitions for a total of $19.2 million in cash and deferred consideration. During the said period, the company also made a $100 million investment in VTS, a Proptech company that helps leasing agents better serve property owners and enables property managers to create more engaging experiences for building tenants.
Quarter in Detail
CBRE Group’s Advisory Services segment reported a year-over-year revenue increase of 0.9% (5.0% in local currency) to $2.4 billion. Leasing activity continued to recover in most global markets, with revenues climbing 14% (17% in local currency). However, significant foreign currency headwinds shrouded strong growth in overseas markets.
Global sales revenues fell 11% (7% in local currency) amid a constrained capital environment. Loan servicing revenues slipped 1% (flat in local currency).
The Global Workplace Solutions (“GWS”) segment registered a year-over-year increase of 16.2% (21.7% in local currency) in revenues to $4.8 billion. Excluding $325 million in revenues from Turner & Townsend, GWS revenues increased 8% (14% in local currency).
The operating profit increased 17.1% (23.5% in local currency) to $219 million. Net revenue growth was strong in Project management and Facilities management.
The Real Estate Investments segment recorded a 15.1% (25.8% in local currency) jump in revenues to $258 million from the year-ago quarter. However, the operating profit declined by approximately $82 million compared to the remarkably strong third quarter of 2021. This was because asset sales were mostly weighted to 2022’s first half compared with the same during last year’s second half. Also, it reflected the slipping of the timing of some expected third-quarter asset sales to 2023.
At the end of the third quarter of 2022, assets under management decreased by $3.0 billion from the second quarter of 2022 to $143.9 billion. This was mainly due to an adverse currency movement.
Balance Sheet Position
CBRE Group exited the third quarter of 2022 with cash and cash equivalents of $1.1 billion, down from $2.4 billion as of Dec 31, 2021.
As of Sep 30, 2022, the company had $4.5 billion in total liquidity. This comprised $1.1 billion in cash in addition to the ability to borrow a total of $3.3 billion under its revolving credit facilities, net of any outstanding letters of credit. The company’s net leverage ratio was 0.21 as of the same date, significantly less than CBRE’s primary debt covenant of 4.25X.
During the September-end quarter, the company repurchased 5.1 million shares at an average price of $80.14, spending around $408.3 million. As of Sep 30, 2022, it had $2.6 billion of stock-repurchase capacity remaining under its authorized buyback program.
Currently, CBRE Group carries a Zacks Rank #4 (Sell).
CBRE Group, Inc. Price, Consensus and EPS Surprise
It’s time to look forward to two stocks from the real estate operation industry — Jones Lang LaSalle Incorporated (JLL - Free Report) and The RMR Group (RMR - Free Report) . While Jones Lang LaSalle is slated to report quarterly numbers on Nov 2, The RMR Group is scheduled to report on Nov 14.
The Zacks Consensus Estimate for Jones Lang LaSalle’s third-quarter 2022 EPS stands at $4.52, suggesting a year-over-year decrease of nearly 1%. JLL currently carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for The RMR Group’s quarterly EPS is pegged at 58 cents, implying a year-over-year increase of 16.0%. RMR currently carries a Zacks Rank of 3.
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CBRE Group (CBRE) Q3 Earnings & Revenues Lag, Stock Down
CBRE Group Inc.’s (CBRE - Free Report) third-quarter 2022 core earnings per share (EPS) of $1.13 lagged the Zacks Consensus Estimate of $1.24. The figure also declined by 18.7% from the year-ago tally. Reflecting negative sentiments, CBRE shares have declined more than 3%.
The quarterly results reflect lower-than-expected revenues amid the weakening of the macro environment, particularly the deterioration of the capital market environment. This caused both sales and loan originations to fall steeply.
CBRE Group generated revenues of $7.53 billion, which compared unfavorably with the Zacks Consensus Estimate of $7.89 billion. However, revenues were up 10.8% year over year.
Net revenues increased 10.8% (15.7% in local currency) year over year to $4.6 billion. Core EBITDA declined 17.3% (13.0% in local currency) to $606 million.
In the third quarter of 2022, CBRE completed three in-fill acquisitions for a total of $19.2 million in cash and deferred consideration. During the said period, the company also made a $100 million investment in VTS, a Proptech company that helps leasing agents better serve property owners and enables property managers to create more engaging experiences for building tenants.
Quarter in Detail
CBRE Group’s Advisory Services segment reported a year-over-year revenue increase of 0.9% (5.0% in local currency) to $2.4 billion. Leasing activity continued to recover in most global markets, with revenues climbing 14% (17% in local currency). However, significant foreign currency headwinds shrouded strong growth in overseas markets.
Global sales revenues fell 11% (7% in local currency) amid a constrained capital environment. Loan servicing revenues slipped 1% (flat in local currency).
The Global Workplace Solutions (“GWS”) segment registered a year-over-year increase of 16.2% (21.7% in local currency) in revenues to $4.8 billion. Excluding $325 million in revenues from Turner & Townsend, GWS revenues increased 8% (14% in local currency).
The operating profit increased 17.1% (23.5% in local currency) to $219 million. Net revenue growth was strong in Project management and Facilities management.
The Real Estate Investments segment recorded a 15.1% (25.8% in local currency) jump in revenues to $258 million from the year-ago quarter. However, the operating profit declined by approximately $82 million compared to the remarkably strong third quarter of 2021. This was because asset sales were mostly weighted to 2022’s first half compared with the same during last year’s second half. Also, it reflected the slipping of the timing of some expected third-quarter asset sales to 2023.
At the end of the third quarter of 2022, assets under management decreased by $3.0 billion from the second quarter of 2022 to $143.9 billion. This was mainly due to an adverse currency movement.
Balance Sheet Position
CBRE Group exited the third quarter of 2022 with cash and cash equivalents of $1.1 billion, down from $2.4 billion as of Dec 31, 2021.
As of Sep 30, 2022, the company had $4.5 billion in total liquidity. This comprised $1.1 billion in cash in addition to the ability to borrow a total of $3.3 billion under its revolving credit facilities, net of any outstanding letters of credit. The company’s net leverage ratio was 0.21 as of the same date, significantly less than CBRE’s primary debt covenant of 4.25X.
During the September-end quarter, the company repurchased 5.1 million shares at an average price of $80.14, spending around $408.3 million. As of Sep 30, 2022, it had $2.6 billion of stock-repurchase capacity remaining under its authorized buyback program.
Currently, CBRE Group carries a Zacks Rank #4 (Sell).
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 operation industry — Jones Lang LaSalle Incorporated (JLL - Free Report) and The RMR Group (RMR - Free Report) . While Jones Lang LaSalle is slated to report quarterly numbers on Nov 2, The RMR Group is scheduled to report on Nov 14.
The Zacks Consensus Estimate for Jones Lang LaSalle’s third-quarter 2022 EPS stands at $4.52, suggesting a year-over-year decrease of nearly 1%. JLL currently carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for The RMR Group’s quarterly EPS is pegged at 58 cents, implying a year-over-year increase of 16.0%. RMR currently carries a Zacks Rank of 3.