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CBRE Group (CBG) Beats Q3 Earnings Estimates, Guides Up

Real estate services firm, CBRE Group Inc.CBG reported third-quarter 2015 adjusted earnings of 51 cents per share, beating the Zacks Consensus Estimate of 45 cents and ahead of the prior-year quarter figure of 40 cents. A rise in revenues aided the results. The company consequently raised its 2015 guidance.

Revenues came in at $2.7 billion, up 19% year over year and surpassed the Zacks Consensus Estimate of approximately $2.6 billion. Fee revenues were also up 14% to $1.9 billion. However, excluding the Global Workplace Solutions (GWS) business, both revenues and fee revenues both climbed 9% (16% in local currency).

Importantly, CBRE revealed that the integration of the GWS business has been on track. The company now expects an uptick in the percentage accretion to 2016 adjusted earnings per share from mid single digits to high single digits from the acquired business.

Cbre Group Inc. (CBG) - Earnings Surprise | FindTheCompany

Quarter in Detail

Revenues from the Americas increased 17% (19% in local currency) year over year to $1.6 billion during the quarter.

Revenues from the EMEA region (primarily Europe) grew 28% (42% in local currency) year over year to $737.9 million, while that from the Asia-Pacific (including Asia, Australia and New Zealand) climbed 12% (29% in local currency) to $285.3 million.

In the Global Investment Management segment, revenues totaled $114.1 million, representing an increase of 9% (19% in local currency). In the Development Services segment, revenues increased 17% to $18.6 million.

Liquidity

CBRE exited third-quarter 2015 with cash and cash equivalents of $440.4 million, down from $740.9 million as of Dec 31, 2014.

Outlook

CBRE raised its guidance for full-year 2015 adjusted earnings per share by 10 cents to $2.00 to $2.05, reflecting 20% year-over-year growth in adjusted earnings per share at the midpoint of the range. Currently, the Zacks Consensus Estimate for 2015 is pegged at $1.96.

Our Viewpoint

Going forward, we believe the company would benefit from strategic in-fill acquisitions, transformational deals, improving leasing, property sales and outsourcing business. Yet, uncertainties in certain global economies, stiff competition and unfavorable foreign currency movement remain concerns.

CBRE Group currently has a Zacks Rank #3 (Hold). Investors interested in the real estate industry may consider stocks like Jones Lang LaSalle Incorporated JLL , Henderson Land Development Co. Ltd. HLDCY and Reis, Inc. REIS . All three stocks hold a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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