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Jones Lang's (JLL) Q1 Earnings & Revenues Beat Estimates

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Jones Lang LaSalle Incorporated (JLL - Free Report) — popularly known as JLL — reported first-quarter 2024 adjusted earnings per share (EPS) of $1.78, beating the Zacks Consensus Estimate of 85 cents. The reported figure increased significantly from the prior-year quarter. Shares of JLL were up 3% during the May 6 regular trading session on the NYSE.

Results reflect better-than-anticipated revenues. The company benefited from the continued strength in its resilient lines of business. Though the quarter saw a rise in most transaction-based businesses, the JLL Technologies and LaSalle segments witnessed poor performance, affecting the results to some extent.

Revenues of $5.12 billion increased 8.7% from the year-ago quarter’s $4.72 billion and surpassed the Zacks Consensus Estimate of $4.94 billion.

Per Christian Ulbrich, CEO of JLL, “JLL’s strong start to 2024 was driven by growth in both our resilient and transactional business lines. In addition, the impact of our cost actions over the last year allowed us to meaningfully improve our profitability while still investing in our business to take advantage of growth opportunities ahead.”

Segment-Wise Performance

During the first quarter, the Markets Advisory segment’s revenues came in at $950.1 million, reflecting a year-over-year gain of 4.8% (in USD). The rise was mainly due to an increase in Property Management and U.S. Leasing revenues. Property Management revenue grew on the back of portfolio expansions carried out in the United States, the UK and Canada. U.S. Leasing growth was led by the office sector, which saw increased deal size and transaction volumes.

Revenues for the Capital Markets segment were $377.6 million, increasing 5.7% (in USD) year over year. The rise was mainly due to an increase in JLL’s Investment Sales and Debt/Equity Advisory revenues year over year across most asset classes, with strength in Japan and Germany, which was most notable in offices.

JLL’s Work Dynamics segment reported revenues of $3.64 billion, up 11.1% (in USD) year over year. The uptick in revenues was driven by continued strong performance in Workplace Management. Its 2023 contract wins and mandate expansions in the Americas have supported Workplace Management’s growth.

JLL Technologies segment reported revenues of $53.9 million, declining 12.2% (in USD) from the prior-year quarter levels. The fall was partially due to lower contract signings in the second half of 2023. Moreover, the lower revenues reflected delayed decisions on technology spend from existing solutions clients, which included certain contract renewals.

The revenues in the LaSalle segment fell 9.6% (in USD) year over year to $103.4 million. The decline in revenues was mainly due to lower advisory fees. This is further attributable to valuation declines in assets under management and lower fees in Europe as a result of structural changes to a lower-margin business.

As of Mar 31, 2024, LaSalle had $89.7 billion of real estate AUM, down from $93.5 billion as of Mar 31, 2023. This resulted from decreases in net valuation and foreign currency and dispositions and withdrawals, partially offset by the rise in acquisitions and uncalled committed capital and cash.

Balance Sheet

JLL exited the first quarter with cash and cash equivalents of $396.7 million, down from $410 million as of Dec 31, 2023.

As of Mar 31, 2024, the net leverage ratio was 1.9, up from 1.2 as of Dec 31, 2023, but down from 2.0 as of Mar 31, 2023. The corporate liquidity was $2.3 billion as of the first quarter's end.

The company repurchased 110,726 shares during the reported quarter for $20.1 million. As of Mar 31, 2024, $1,073.5 million remained authorized for repurchase under the share repurchase program.

JLL currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



Performance of Other Broader Real Estate Market Stocks

CBRE Group Inc. (CBRE - Free Report) reported first-quarter 2024 core earnings per share (EPS) of 78 cents, ahead of the Zacks Consensus Estimate of 69 cents.

The results of CBRE reflect growth in its resilient lines of business. Global Workplace Solutions experienced strong business wins, though higher costs and one-time expenses affected margins. The leasing business performed well due to office leasing growth on a worldwide basis amid a resilient economy and progress on return-to-office plans. However, property sales transaction activity remained affected amid the persistent inflation that kept interest rates higher than expected.

OUTFRONT Media Inc. (OUT - Free Report) reported first-quarter 2024 adjusted funds from operations (AFFO) per share of 14 cents, in line with the Zacks Consensus Estimate.

The rise in billboard revenues in the quarter aided decent year-over-year top-line growth. However, higher interest expenses and operating expenses acted as a dampener.

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