CBRE Group (CBRE) Beats Q2 Earnings Estimates, Raises View

CBRE Group Inc.CBRE reported second-quarter 2018 adjusted earnings per share of 74 cents, beating the Zacks Consensus Estimate of 72 cents. The figure also marked a 10.4% increase from the prior-year tally of 67 cents.

Results indicate strong revenue growth driven by leasing, occupier outsourcing and development services.

On a GAAP basis, earnings per share came in at 67 cents compared with the prior-year quarter tally of 59 cents.

The company posted revenues of around $5.1 billion, which beat the Zacks Consensus Estimate of $4.7 billion. It also compared favorably with the year-ago tally of $4.4 billion. Moreover, fee revenues were up 15% (12% in local currency) year over year to $2.5 billion, while organic fee revenue growth was 13% (10% local currency).

CBRE Group reported year-over-year leasing revenue growth of 20% (18% local currency). Global occupier outsourcing revenues increased 18% (15% local currency) from the prior-year quarter, with solid growth around the world and specifically in Europe, the Middle East & Africa (EMEA) and Asia Pacific (APAC).

In addition, capital markets businesses, which include property sales and commercial mortgage origination, reported combined revenue growth of 3% (2% local currency). However, global property sales revenues inched up 1% (down 2% local currency).

Quarter in Detail

CBRE Group's largest business segment - The Americas - reported 11% rise (same in local currency) in revenues from the prior-year quarter to around $3.1 billion, registering growth in Brazil, Canada and the United States. The APAC segment witnessed revenue growth of 11% (8% local currency) from the prior-year quarter to $538.2 million, with healthy growth in Greater China and India.

Revenues from the EMEA segment rose 29% (20% in local currency) to $1.3 billion, supported by encouraging performance in France, Italy, the Netherlands and the U.K.

In the Global Investment Management segment, revenues totaled $98.9 million, up 7% year over year (2% in local currency), while the Development Services segment posted revenues of $18.4 million, up 8% year over year.


CBRE Group exited second-quarter 2018 with cash and cash equivalents of $531.5 million, down from $751.8 million as of Dec 31, 2017.


CBRE Group raised its outlook for full-year 2018. The company expects adjusted earnings per share of $3.10 to $3.20, up from $3.00 to $3.15, denoting 15% growth for the full year at the mid-point of the outlook. The Zacks Consensus Estimate for the same is currently pegged at $3.12.

Our Viewpoint

We are encouraged with the better-than-expected performance of CBRE Group in the June-end quarter. The company's extensive real-estate products and service offerings, improving leasing and outsourcing business, strategic in-fill acquisitions, transformational deals and healthy balance sheet are expected to be conducive to near-term results.

Nevertheless, with planned investments, as well as shift toward a comparatively lower margin business, the company's margin is likely to be affected in the near future. Also, competition from international, regional and local players remains a concern for CBRE Group.

CBRE Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

CBRE Group, Inc. Price, Consensus and EPS Surprise

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

Investors interested in the real estate industry can also consider some better-ranked stocks like RE/MAX Holdings, Inc. RMAX , Henderson Land Development Company Limited HLDCY and Newmark Group, Inc. NMRK . While RE/MAX Holdings sports a Zacks Rank of 1, Henderson Land Development Company and Newmark Group carry a Zacks Rank of 2 (Buy).

The Zacks Consensus Estimate for full-year 2018 earnings of RE/MAX Holdings has been revised 5.5% upward to $2.29 over the past two months.

The same for Henderson Land Development Company remained flat, in a week's time, at 44 cents.

The current-year earnings estimate for Newmark Group has been revised 3.4% north to $1.53 in the past two months.

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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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