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CBRE Group (CBRE) Q4 Earnings and Revenues Top Estimates
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CBRE Group Inc.’s (CBRE - Free Report) fourth-quarter 2023 core earnings per share (EPS) of $1.38 surpassed the Zacks Consensus Estimate of $1.21. Quarterly revenues of $8.95 billion also compared favorably with the Zacks Consensus Estimate of $8.62 billion. Reflecting positive sentiments, shares of CBRE were up more than 8% so far today.
Results reflect growth in its resilient lines of business, led by Global Workplace Solutions (“GWS”). Despite growth in GWS and other resilient businesses, commercial real estate capital markets were under significant pressure. It also witnessed year-over-year growth in operating profit across all three business segments.
On a year-over-year basis, core EPS and revenues increased 3.8% and 9.2%, respectively.
Net revenues increased 4.3% (2.9% in local currency) year over year to $5.19 billion. Core EBITDA increased 10.4% (6.8% in local currency) to $737 million.
For the full-year 2023, core EPS came in at $3.84, lower than the prior-year tally of $5.69, while surpassing the Zacks Consensus Estimate of $3.69. This was backed by a 3.6% increase in revenues to $31.95 billion.
Quarter in Detail
CBRE Group’s Advisory Services segment reported a year-over-year revenue decrease of 0.9% (1.9% in local currency) to $2.59 billion. Our estimate was pegged at $2.41 billion.
Global leasing revenues rose 1% (flat in local currency), driven mainly by Europe, Middle East & Africa and Asia-Pacific leasing revenue growth. Whereas America’s leasing revenues remained flat.
Global sales revenues fell 19% (20% in local currency) amid a challenging real estate capital markets environment. However, mortgage origination revenues rose 23% (same in local currency) on the back of interest earnings on escrow balances.
The GWS segment registered a year-over-year increase of 15.3% (13.6% in local currency) in revenues to $6.10 billion. Our estimate was pegged at $5.91 billion.
With increased activity in the technology and financial services sectors within the enterprise business and continued robust growth of the local business, especially in the United States, Facilities management net revenues increased 14% (13% local currency). Also, due to the continued expansion of Turner & Townsend’s large-scale program management work globally, Project management net revenues rose 11% (9% local currency). In 2024, the pipeline remains elevated above the year-earlier levels, with endeavors spanning a wide range of sectors, most notably industrial & logistics and financial & professional services.
The Real Estate Investments (REI) segment experienced a decline of 9.9% (12.7% in local currency) in revenues to $262 million. Our estimate was pegged at $269.5 million.
At the end of the fourth quarter of 2023, assets under management increased $3.3 billion from the third quarter of 2023 to $147.5 billion. This was mainly due to favorable foreign currency movement and modest net capital inflows.
In the fourth quarter of 2023, CBRE completed five in-fill acquisitions for a total of $111 million in cash and non-cash consideration. These included four in Advisory Services and one in REI.
Balance Sheet Position
CBRE Group exited the fourth quarter of 2023 with cash and cash equivalents of $1.27 billion, down from $1.32 billion as of Dec 31, 2022.
As of Dec 31, 2023, CBRE Group had $4.9 billion in total liquidity. This comprised nearly $1.3 billion in cash in addition to the ability to borrow a total of approximately $3.7 billion under its revolving credit facilities, net of any outstanding letters of credit. The company’s net leverage ratio was 0.71 as of the same date, significantly less than CBRE’s primary debt covenant of 4.25X.
During the December-end quarter, the company repurchased 0.3 million shares for $19.6 million, with an average price per share of $68.69. As of Dec 31, 2023, it had $1.5 billion of stock-repurchase capacity remaining under its authorized buyback program.
Outlook
For the full-year 2024, CBRE projects core EPS to range between $4.25-$4.65, indicating mid-teens percentage growth at the midpoint of the range.
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 Cushman & Wakefield plc (CWK - Free Report) . While Cushman & Wakefield is slated to report quarterly numbers on Feb 20, Jones Lang LaSalle is scheduled to come up with its figures on Feb 27.
The Zacks Consensus Estimate for Cushman & Wakefield’s fourth-quarter 2023 EPS is pegged at 39 cents, implying a year-over-year decrease of 15.2%. CWK currently carries a Zacks Rank of 4.
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CBRE Group (CBRE) Q4 Earnings and Revenues Top Estimates
CBRE Group Inc.’s (CBRE - Free Report) fourth-quarter 2023 core earnings per share (EPS) of $1.38 surpassed the Zacks Consensus Estimate of $1.21. Quarterly revenues of $8.95 billion also compared favorably with the Zacks Consensus Estimate of $8.62 billion. Reflecting positive sentiments, shares of CBRE were up more than 8% so far today.
Results reflect growth in its resilient lines of business, led by Global Workplace Solutions (“GWS”). Despite growth in GWS and other resilient businesses, commercial real estate capital markets were under significant pressure. It also witnessed year-over-year growth in operating profit across all three business segments.
On a year-over-year basis, core EPS and revenues increased 3.8% and 9.2%, respectively.
Net revenues increased 4.3% (2.9% in local currency) year over year to $5.19 billion. Core EBITDA increased 10.4% (6.8% in local currency) to $737 million.
For the full-year 2023, core EPS came in at $3.84, lower than the prior-year tally of $5.69, while surpassing the Zacks Consensus Estimate of $3.69. This was backed by a 3.6% increase in revenues to $31.95 billion.
Quarter in Detail
CBRE Group’s Advisory Services segment reported a year-over-year revenue decrease of 0.9% (1.9% in local currency) to $2.59 billion. Our estimate was pegged at $2.41 billion.
Global leasing revenues rose 1% (flat in local currency), driven mainly by Europe, Middle East & Africa and Asia-Pacific leasing revenue growth. Whereas America’s leasing revenues remained flat.
Global sales revenues fell 19% (20% in local currency) amid a challenging real estate capital markets environment. However, mortgage origination revenues rose 23% (same in local currency) on the back of interest earnings on escrow balances.
The GWS segment registered a year-over-year increase of 15.3% (13.6% in local currency) in revenues to $6.10 billion. Our estimate was pegged at $5.91 billion.
With increased activity in the technology and financial services sectors within the enterprise business and continued robust growth of the local business, especially in the United States, Facilities management net revenues increased 14% (13% local currency). Also, due to the continued expansion of Turner & Townsend’s large-scale program management work globally, Project management net revenues rose 11% (9% local currency). In 2024, the pipeline remains elevated above the year-earlier levels, with endeavors spanning a wide range of sectors, most notably industrial & logistics and financial & professional services.
The Real Estate Investments (REI) segment experienced a decline of 9.9% (12.7% in local currency) in revenues to $262 million. Our estimate was pegged at $269.5 million.
At the end of the fourth quarter of 2023, assets under management increased $3.3 billion from the third quarter of 2023 to $147.5 billion. This was mainly due to favorable foreign currency movement and modest net capital inflows.
In the fourth quarter of 2023, CBRE completed five in-fill acquisitions for a total of $111 million in cash and non-cash consideration. These included four in Advisory Services and one in REI.
Balance Sheet Position
CBRE Group exited the fourth quarter of 2023 with cash and cash equivalents of $1.27 billion, down from $1.32 billion as of Dec 31, 2022.
As of Dec 31, 2023, CBRE Group had $4.9 billion in total liquidity. This comprised nearly $1.3 billion in cash in addition to the ability to borrow a total of approximately $3.7 billion under its revolving credit facilities, net of any outstanding letters of credit. The company’s net leverage ratio was 0.71 as of the same date, significantly less than CBRE’s primary debt covenant of 4.25X.
During the December-end quarter, the company repurchased 0.3 million shares for $19.6 million, with an average price per share of $68.69. As of Dec 31, 2023, it had $1.5 billion of stock-repurchase capacity remaining under its authorized buyback program.
Outlook
For the full-year 2024, CBRE projects core EPS to range between $4.25-$4.65, indicating mid-teens percentage growth at the midpoint of the range.
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 Cushman & Wakefield plc (CWK - Free Report) . While Cushman & Wakefield is slated to report quarterly numbers on Feb 20, Jones Lang LaSalle is scheduled to come up with its figures on Feb 27.
The Zacks Consensus Estimate for Jones Lang LaSalle’s fourth-quarter 2023 EPS stands at $3.70, suggesting a year-over-year decrease of 15.1%. JLL currently carries a Zacks Rank of 4. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Cushman & Wakefield’s fourth-quarter 2023 EPS is pegged at 39 cents, implying a year-over-year decrease of 15.2%. CWK currently carries a Zacks Rank of 4.