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Jones Lang LaSalle (JLL) Stock Up Despite Q1 Earnings Miss

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Jones Lang LaSalle Inc. (JLL - Free Report) — popularly known as JLL — delivered first-quarter adjusted earnings of 49 cents per share, missing the Zacks Consensus Estimate of 76 cents. The bottom-line figure also compares unfavorably with the year-ago adjusted earnings of 89 cents per share.

Revenues for the first quarter came in at $4.1 billion, outpacing the Zacks Consensus Estimate of $3.8 billion by 6%. The reported figure improved 7.21%, year over year. Moreover, fee revenues were up 15% year over year to $1.5 billion.

Results highlight robust Real Estate Services revenue growth. The company witnessed solid performance of the Americas. Moreover, continued progress on the HFF Inc. integration resulted in solid Capital Markets performance.

Shares of JLL rallied 1.35% to $102.41 during Tuesday's regular trading session.

Behind the Headline Numbers

During the March-end quarter, JLL’s Real Estate Services revenues climbed 7% year over year to $3.9 billion. Result reflected solid Capital Markets performance, largely due to the Jul 1, 2019, acquisition of HFF Inc.

In the Americas, revenues and fee revenues came in at $2.52 billion and $918.4 million, respectively, reflecting 12% and 29% year-over-year growth. Growth was strong and broad-based across all service lines, backed by Capital Markets. HFF reaped $144.4 million of incremental revenues, reflecting solid contributions from debt placement. Further, Project & Development Services fee revenues climbed year on year.

Revenues and fee revenues of the EMEA segment came in at $755.9 billion and $310.5 million, up 4% but down 2%, respectively, from the year-ago period. Solid performance in Project & Development Services, particularly projects in MENA, as well as the valuations business, was more than offset by declines in Capital Markets and Leasing.

For the Asia-Pacific segment, revenues and fee revenues came in at $712.1 million and $177.7 million, respectively, marking a year-over-year fall of 5% and 10%. The segment witnessed significant revenue and fee revenue declines in Capital Markets during the first quarter. However, the decline in leasing revenues reflects the choppy market conditions in Hong Kong and China amid coronavirus tensions. Moreover, the drop in Property & Facility Management fee revenues was mainly due to client turnover and timing.

Revenues in the LaSalle segment increased 7% year over year to $104.9 million. Growth in advisory revenues mainly resulted from continued strong private equity capital raising during the trailing 12 months.

At the end of first-quarter 2020, assets under management were $69.5 billion, up 2.8% from the $67.6 billion recorded at the end of the last quarter.

Liquidity

JLL exited the first quarter with cash and cash equivalents of $720.7 million, up from $451.9 million as of Dec 31, 2019.

In addition, the company’s net debt totaled $1.5 billion as of Mar 31, 2020, denoting an increase of about $650 million from Dec 31, 2019. In addition, the figure marked an increase of $590 million from Mar 31, 2019, reflecting around $650 million of incentive compensation payments made in the first quarter.

JLL currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We now look forward to the earnings releases of other REITs like Ventas, Inc. (VTR - Free Report) , Kimco Realty Corp. (KIM - Free Report) and Simon Property Group, Inc. (SPG - Free Report) . All three companies are scheduled to release quarterly numbers on May 7.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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