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UPDATE 2-CBRE Group qrtly profit up as revenue rises 21 pct
October 28, 2011 / 12:21 AM / 6 years ago

UPDATE 2-CBRE Group qrtly profit up as revenue rises 21 pct

* Q3 net income, ex items, $0.24 vs Wall Street View $0.24

* Q3 revenue up 21 pct to $1.53 bln

By Ilaina Jonas

Oct 27 (Reuters) - CBRE Group Inc , one of the world’s largest real estate service companies, said its third-quarter net income rose 12 percent, citing growth in its unit that manages real estate needs for corporations and property sales brokerage business in the Americas.

Third-quarter net income rose to $63.8 million, or 20 cents a share, from $57.0 million, or 18 cents a share, in the year-earlier quarter, the company, formerly called CB Richard Ellis Group Inc, said on Thursday.

Stripping out charges including those related to its acquisition of most of ING Group NV’s real estate arm and impairments, the company earned $77 million, or 24 cents per share, up from $62.4 million, or 20 cents a share, in the year-ago quarter.

Excluding the charges, earnings met the average forecast of 24 cents per share, according to Thomson Reuters I/B/E/S.

CBRE, whose businesses include brokering sales, financing and leases, as well as managing properties and investment funds, said revenue grew 21 percent to $1.53 billion, beating analysts’ expectations of $1.47 billion.

Global real estate leasing and investment had staged a strong rebound in the first half of the year. But since the U.S. debt ceiling crisis in the summer and the sluggish economy, coupled with the instability in Europe those high-margin businesses slowed during the quarter.

“CBRE hit the earnings number but the revenues across the board are better than expected,” JMP Securities analyst Will Marks said. “I would expect a similar performance out of JLL (Jones Lang LaSalle.) I think that CBRE and JLL together are taking share given their multi-market, multi-product platforms, essentially being a one-stop shop.”

Rival Jones Lang LaSalle Inc reports its third-quarter results next week.

Revenue from the CBRE’s outsourcing business - in which it manages property needs for global corporations -- rose 19 percent. Global property sales commission revenue was up 23 percent, driven by a 42 increase in the Americas. Its commercial mortgage brokerage revenue rose 32 percent. Only its development services did not post growth.

CBRE’s Global Investment Management business saw revenue rise 56 percent, helped by revenue generated from CBRE Clarion Securities, the global listed real estate securities business it acquired in July from ING Group NV.

Recently CBRE closed on its acquisition of ING’s real estate investment management business in Asia, and plans to complete its purchase of ING REIM business in Europe before the end for the year.

By region, CBRE’s Europe, the Middle East, and Africa arm registered the highest revenue growth up 28 percent to $276 million. A 48 percent jump in outsourcing revenue and a 33 percent growth in leasing revenue propelled the growth.

Asia Pacific revenue rose 24 percent to $208.1 million.

In the Americas region, revenue increased 17 percent to $954.2 million.

The company maintained its forecast for the year for earnings, excluding items, in the range of 95 cents per share to $1.05 per share. Analysts had forecast 99 cents per share.

Shares of CBRE, which released its quarterly financial report after the close of the market, closed up 7.4 percent at $17.12 on the New York Stock Exchange, and the S&P 500 closed up 3.43 percent.

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