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CBRE Group (CBG) Beats on Q3 Earnings, Lifts 2017 Guidance

CBRE Group Inc. CBG reported third-quarter 2017 adjusted earnings per share of 64 cents, beating the Zacks Consensus Estimate of 54 cents. The figure also marked a 28% increase from the prior-year quarter tally of 50 cents.

Results indicate strength in all three of its regional services businesses and solid growth in occupier outsourcing business. The company also raised its adjusted earnings per share outlook for full-year 2017.

On a GAAP basis, earnings per share came in at 58 cents, ahead of the prior-year quarter earnings per share of 31 cents.

The company posted revenues of around $3.55 billion, which beat the Zacks Consensus Estimate of $3.42 billion. The figure also came in higher than the year-ago tally of $3.19 billion. Moreover, fee revenues were up 10% (9% in local currency) year over year to $2.3 billion.

CBRE Group, Inc. Price, Consensus and EPS Surprise
 

CBRE Group, Inc. Price, Consensus and EPS Surprise | CBRE Group, Inc. Quote

Quarter in Detail

CBRE Group’s largest business segment — The Americas — reported 11% rise in revenues from the prior-year quarter to nearly $2.0 billion, with double-digit growth in occupier outsourcing and leasing. Asia Pacific (APAC) witnessed 22% jump in revenues to $440.9 million (21% in local currency), with solid growth recorded in Greater China, India, Japan and Singapore.

Revenues from the Europe, the Middle East & Africa (EMEA) segment rose 9% (7% in local currency) to $1.0 billion, marking solid gains in the U.K.

In the Global Investment Management segment, revenues totaled $92.1 million, flat year over year (down 1% in local currency), while the Development Services segment reported revenues of nearly $14.5 million, down 12% year over year.

Liquidity

CBRE Group exited third-quarter 2017 with cash and cash equivalents of $955.6 million, up from $762.6 million as of Dec 31, 2016.

2017 Outlook

CBRE Group raised its outlook for 2017 adjusted earnings per share to $2.58-$2.68. The Zacks Consensus Estimate for the same is currently pegged at $2.56.

Our Viewpoint

We are encouraged with the better-than-expected result of CBRE Group in the third quarter. The company’s extensive real-estate products and service offerings, and outsourcing business, strategic in-fill acquisitions, transformational deals, and healthy balance sheet are anticipated to drive its performance over the long term.

CBRE Group currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the real estate industry can also consider other similarly-ranked stocks like HFF, Inc. HF, Jones Lang LaSalle Incorporated JLL and Invitation Homes Inc. INVH.

The Zacks Consensus Estimate for full-year 2017 earnings of HFF Inc. moved up 3.5% $2.36 in a week’s time.

The same for Jones Lang LaSalle is pegged at $8.01 that denotes a 0.4% increase in two months’ time.   

The fiscal 2017 Zacks Consensus Estimate for The RMR Group is pegged at $2.72. It has remained unchanged in a month’s time.


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