CB Richard Ellis Group, Inc. (CBG) reported net income of $61.2 million or 19 cents per share in the second quarter of fiscal 2011, compared with $54.8 million or 17 cents per share in the year-ago period. Excluding non-recurring items, the company reported net income of $67 million or 21 cents per share during the quarter compared with $58.8 million or 18 cents per share in the year-earlier quarter. Recurring earnings, however, missed the Zacks Consensus Estimate by three cents.
The company reported revenue of $1.4 billion in the second quarter, up 21% from $1.2 billion in the year-earlier quarter. The better-than-expected result was primarily driven by improved performance across almost all geographic regions and business lines in the backdrop of steadily improving global market fundamentals.
Second quarter 2011 EBITDA (earnings before interest, tax, depreciation, and amortization) increased 3% to $166.1 million, compared with $161.6 million in the year-ago quarter.
CB Richard Ellis signed 47 long-term real estate outsourcing contracts (including 15 new clients) and 32 expansions or contract renewals in the quarter. Global leasing revenue increased 22% during the quarter while outsourcing revenue jumped 13% with all three geographic regions delivering double-digit growth.
Geographically, revenue growth in the quarter was led by the Americas region Revenue in the Americas, which is the largest business segment of the company, with an increase of 24%. Asia-Pacific revenues grew 19% on the back of strong upside in Australia, India, and China. Revenues from the EMEA (Europe, Middle East and Africa) region increased 16% year-over-year, driven by leasing and outsourcing growth.
The Global Investment Management segment, comprising investment management operations in the U.S., Europe and Asia, reported revenues of $57.6 million during the quarter compared with $46.9 million in the year-earlier quarter, driven by higher asset management fees. Assets under management totaled $39.1 billion at the end of the quarter, up 4.0% from the second quarter of 2010. During the quarter, Development Services segment, that includes real estate development and investment activities primarily in the U.S., reported revenues of $17.2 million versus $18.7 million in the year-ago quarter. The development pipeline of the company totaled $4.9 billion, up $0.5 billion from second quarter 2010.
Following the close of the second quarter of 2011, the company completed the acquisition of ING Group’s global real estate securities business, known as CBRE Clarion Securities, and remains on schedule to close the acquisition of ING Group’s real estate investment management businesses in Europe and Asia by the end of fiscal 2011. During the reported quarter, the company also closed three in-fill acquisitions designed to bolster its services platform.
The company also intends to change its corporate name to CBRE Group, Inc., effective January 1, 2012, in order to align its corporate name with its industry-leading CBRE brand.
At quarter end, CB Richard Ellis had cash and cash equivalents of $752.1 million. The gradual revival of the overall economy has enabled the company to drive growth and management further expects to continue the momentum in 2011. We also remain encouraged by indications of stabilization and recovery of market conditions.
CB Richard Ellis currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Jones Lang Lasalle Inc (JLL)currently retains a Zacks #3 Rank.
CB RICHARD ELLS (CBG): Free Stock Analysis Report
JONES LANG LASL (JLL): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment