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CBRE, JLL see cautious environment
NEW YORK |
NEW YORK (Reuters) - Two of the largest global real estate services companies reported higher profits on Tuesday but each warned the cautious global economic environment was affecting real estate.
CBRE Group Inc (CBG.N) said second-quarter earnings, excluding charges, rose 31 percent, as strength in the Americas offset a decline in revenue from Europe.
Its earnings, excluding items, was $88 million, or 27 cents per share, on revenue of $1.60 billion, beating Wall Street's forecast of 26 cents per share on revenue of $1.57 billion, according to Thomson Reuters I/B/E/S.
Meanwhile, Jones Lang LaSalle reported second-quarter earnings, excluding charges of $51 million, or $1.13 per share, up 2 percent, on revenue that rose 9 percent to $921 million. But Jones Lang LaSalle, based in Chicago, missed Wall Street's forecast of $1.26 per share on revenue of $933.1 million.
That was due in part to the method of accounting of its Property & Facility Management, which initially results in low margins that fall to the bottom line, JMP Securities analyst Will Marks said.
CBRE maintained its forecast for the year of earnings, excluding charges, of $1.20 to $1.25 per share, excluding charges, noting the sluggish global economy in many parts of the world. Analysts expect $1.23 per share.
Colin Dyer, Jones Lang LaSalle's president and chief executive officer, called the overall second quarter: "a cautious market environment."
"The bottom-line miss is a lot of growth came from lower margins in its Property & Facility Management business," Marks said of Jones Lang LaSalle. Of CBRE he said: "The largest business, which is leasing, is facing some amount of headwinds."
Shares of CBRE closed at $15.58, down 4 percent or 66 cents on the New York Stock Exchange and were unchanged after-hours. Shares of Jones Lang LaSalle closed down 0.2 percent at $66.69 on the New York Stock Exchange and lost 0.3 percent to $66.51 after hours.
(Reporting By Ilaina Jonas; Editing by Bernard Orr and Phil Berlowitz)
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