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Why Is Jones Lang LaSalle (JLL) Down 8.6% Since Last Earnings Report?

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A month has gone by since the last earnings report for Jones Lang LaSalle (JLL - Free Report) . Shares have lost about 8.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Jones Lang LaSalle due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Jones Lang LaSalle Q3 Earnings Surpass, Revenues Up Y/Y

JLL reported third-quarter 2018 adjusted earnings of $3.02 per share, surpassing the Zacks Consensus Estimate of $2.31. The bottom line compares favorably with the year-ago adjusted earnings of $2.21 per share.

Revenues for the reported quarter came in at around $3.97 billion, surpassing the Zacks Consensus Estimate of $3.96 billion. The reported figure improved 12.8%, year over year. Fee revenues were up 12.1% year over year to $1.59 billion.

Results highlight robust organic growth and strong cash flows from operations. The company also recorded Real Estate Services revenue growth.

Behind the Headline Numbers

During the quarter under review, JLL’s Real Estate Services revenues climbed 11% year over year to $3.8 billion. In the Americas, revenues and fee revenues came in at $2.2 billion and $774.1 million, respectively, indicating 14.6% and 11.6% year-over-year growth. This was backed by growth in the Property & Facility Management segment, and solid performance in the company’s portfolio in Mid-Atlantic, Southwest, Houston and Midwest U.S.

Revenues and fee revenues of the EMEA segment were $805.6 million and $396.7 million, up 7.4% and 3.6%, respectively, from the year-ago period. Growth in fee revenue was driven by robust performance of Project & Development Services and Leasing segments.

For the Asia-Pacific segment, revenues and fee revenues came in at $790 million and $252.3 million, respectively, marking year-over-year jump of 5.4% and 2.2%. Higher leasing activity in office sectors of China and Australia aided overall fee revenue growth.

Revenues from the LaSalle Investment Management segment recorded rise of 69% year over year to $172.6 million. Strong incentive fees due to real estate dispositions and higher advisory fees supported results. At the end of the Sep-end quarter, assets under management were $59.5 billion, down from $59.9 billion recorded at the end of the last reported quarter.

Liquidity

Jones Lang exited the reported quarter with cash and cash equivalents of $327 million, up from $268 million as of Dec 31, 2017. At the end of third-quarter 2018, the company’s net debt totaled $742.8 million, down $229.8 million from the prior-quarter end.

How Have Estimates Been Moving Since Then?

Fresh estimates followed an upward path over the past two months.

VGM Scores

Currently, Jones Lang LaSalle has a great Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Jones Lang LaSalle has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.




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