Jones Lang LaSalle Inc.
) reported modest results in fourth quarter 2012 with adjusted
earnings of $2.60 per share, a cent short of the Zacks Consensus
Estimate of $2.61 per share. However, adjusted earnings were
ahead of $2.56 per share reported in the year-ago quarter.
Quarterly results were benefited by decent growth in revenues but
higher expenses acted as a dampener.
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Revenues for the reported quarter were $1.25 billion, slightly
above the Zacks Consensus Estimate of $1.21 billion and up 9%
year over year. Adjusted earnings before interest, taxes,
depreciation and amortization (adjusted EBITDA) came in at $185
million, reflecting a year-over-year increase of 3%.
Jones Lang's full year 2012 adjusted earnings of $5.48 per share
were in line with the Zacks Consensus Estimate and exceeded the
prior-year earnings of $4.83 per share. Full year 2012 revenues
were $3.93 billion, slightly above the Zacks Consensus Estimate
of $3.90 billion and improved 12% from the prior year. Adjusted
EBITDA came in at $436 million, up 10% from a year ago.
On a GAAP basis, Jones Lang reported net income of $107 million
or $2.38 per share, up from $85 million or $1.91 per share
reported in the year-ago quarter. For full year 2012, the
company's net income came in at $208 million or $4.63 per share,
ahead of $164 million or $3.70 per share recorded in 2011.
Quarter in Detail
By segment, revenues from Jones Lang's Real Estate Services
segment increased 9% from the prior-year quarter to $1.2 billion
in the reported quarter.
Revenues from the Americas region came in at $550.0 million, a
year-over-year increase of 9%, primarily driven by growth in
revenue in leasing as well as Capital Markets & Hotels.
Revenues in EMEA (Europe, Middle East, and Africa) increased 4%
from the prior-year quarter to $352.2 million as leasing as well
as project & development services revenues moved up in the
In the Asia-Pacific region, revenue during the quarter increased
18% year over year to $278.3 million, led by solid progress in
revenue from categories such as Capital Markets & Hotels,
Project & Development Services as well as Property &
Revenues from LaSalle Investment Management segment moved down 3%
year over year to $64.6 million. This reflected a fall in
advisory fees and equity earnings, partly offset by a rise in
transactions fees and incentive fees. At quarter-end, assets
under management were $47 billion.
Total operating expenses were $1.1 billion for the quarter,
representing a year-over-year increase of about 7%. The hike was
mainly driven by increases in variable compensation.
Balance Sheet Position
At year-end 2012, Jones Lang had an outstanding debt of $538
million, which decreased $105 million during 2012. Outstanding
debt on long-term revolving credit facility was $169 million as
of Dec 31, 2012, down from $463 million reported last year. Cash
and cash equivalents at year-end 2012 were $152.2 million, down
from $184.5 million at year-end 2011.
Jones Lang, which operates as a single-source provider of real
estate solutions with a broad range of real estate product and
services, has an extensive knowledge of domestic and
international real estate markets. In addition, Jones Lang has a
strong balance sheet that enables it to continually invest in
value drivers that act as key differentiators against tough
Moving forward, Jones Lang's management is confident of
continuing with its winning streak in 2013 with a healthy
pipeline, modestly improving global market dynamics, sustained
market share gains, and disciplined cost management efforts.
We believe that the company is well on course to continue to post
improving performance in the coming quarters. Yet, with a
relative decline in real estate fundamentals, demand for Jones
Lang's services has decreased compared to the pre-recession
levels, which is a cause of concern.
Jones Lang currently has a Zacks Rank #3 (Hold). A number of
companies that are performing better and are worth a look in the
same industry include
E-House (China) Holdings Limited
IFM Investments Limited
PennyMac Mortgage Investment Trust
), all carrying Zacks Rank #2 (Buy).