About a month has gone by since the last earnings report for Jones Lang LaSalle IncorporatedJLL . Shares have lost about 3.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
JLL Beats Q2 Earnings and Revenue Estimates
JLL reported second-quarter 2017 adjusted earnings of $1.82 per share, beating the Zacks Consensus Estimate of $1.45. However, the bottom line came in lower than the year-ago adjusted earnings of $1.93 per share.
Based on strong leasing activities during the quarter, revenues came in at $1.83 billion, surpassing the Zacks Consensus Estimate of $1.79 billion. The figure was up 14.4% year over year. Fee revenues increased 14.1% year over year to $1.53 billion.
However, adjusted EBITDA margin, calculated on a fee-revenue basis, was 10.3%, compared with 11.9% last year, reflecting the anticipated decline in LaSalle incentive fees as well as ongoing M&A integration.
Behind the Headline Numbers
During the quarter, fee revenues from the U.S. were $741.2 million, indicating 18.3% year-over-year increase. Fee revenues in the EMEA (Europe, the Middle East and Africa) region grew 31.8% year over year to $439.1 million, while that in the Asia-Pacific region climbed 9.3% year over year to $279.6 million. Revenues from the LaSalle Investment Management segment plummeted 42.7% year over year to $72.8 million. At the end of the quarter, assets under management were $57.6 billion, marginally down from $58 billion witnessed at the end of the prior quarter.
Jones Lang exited the reported quarter with cash and cash equivalents of $250.3 million, down from $258.5 million as of Dec 31, 2016. At the end of the second quarter, the company's net debt was $1.3 billion, down $121 million from the prior-quarter end. This reflects a significant improvement in the company's working capital management.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.
Jones Lang LaSalle Incorporated Price and Consensus
At this time, Jones Lang LaSalle's stock has a nice Growth Score of B, though it is lagging a lot on the momentum front with a D. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value and growth investors.
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.