Helped by robust growth in fee revenues, Jones Lang LaSalle Inc. (JLL), which shortened its name to “JLL”, reported encouraging fourth-quarter 2014 adjusted earnings of $4.30 per share. Results comfortably beat the Zacks Consensus Estimate of $3.84 per share and came in well above the year-ago quarter figure of $3.33.
During the reported quarter, revenues came in at around $1.75 billion, well ahead of the Zacks Consensus Estimate of $1.56 billion and up 15.9% year over year. Consolidated fee revenue increased 15.4% from the prior-year quarter to $1.56 billion, driven by revenue growth in Real estate and LaSalle Investment Management segments.
As a result, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) came in at $297 million, reflecting a year-over-year increase of 29.1%. Adjusted operating income margin (calculated on a fee-revenue basis) increased to 16.9% in the quarter from 14.8% in the prior-year quarter.
In 2014, JLL reported adjusted earnings of $8.69 per share. Results surpassed the Zacks Consensus Estimate of $8.22 as well as the prior-year figure of $6.32.
Further, in 2014, revenues came in at around $5.43 billion, well ahead of the Zacks Consensus Estimate of $4.66 billion and up 21.7% year over year.
Quarter in Detail
Geographically, fee revenues from the Americas amounted to $688.4 million, denoting a year-over-year increase of 13.8%. Fee revenues in the EMEA (Europe, the Middle East and Africa) region increased 16.6% from the prior-year quarter to $475.1 million; while in the Asia-Pacific region it rose 11.5% year over year to $302.5 million.
Moreover, revenues from LaSalle Investment Management segment increased 29.7% year over year to $98.7 million. At the end of fourth-quarter 2014, assets under management totaled $53.6 billion, up from $53 billion in the prior-quarter end.
Liquidity
JLL exited the fourth quarter with cash and cash equivalents of $250.4 million, up from $152.7 million at year-end 2013. Backed by solid cash generation capabilities, the company reduced its net debt to $163 million from $437 million in the year-ago quarter.
Our Viewpoint
Better-than-expected results at JLL keep us encouraged. Amid solid environment in the real estate market, we believe that strength in the company’s Leasing and Property & Facility Management lines as well as LaSalle Investment Management business would help it ride on the growth trajectory.
JLL currently holds a Zacks Rank #3 (Hold). Investors interested in the real estate sector may also consider stocks like Altisource Residential Corporation (RESI), Henderson Land Development Co. Ltd. (HLDCY) and Alexander & Baldwin, Inc. (ALEX). While Altisource Residential holds a Zacks Rank #1 (Strong Buy), both Henderson Land Development and Alexander & Baldwin carries a Zacks Rank#2 (Buy).
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