CB Richard Ellis 2nd-quarter profit falls 88 pct
NEW YORK (Reuters) - CB Richard Ellis Group Inc (CBG.N), the world's largest commercial real estate brokerage, said quarterly net income plunged 88 percent, partly on lower brokerage fees from sales that have all but dried up due to the severely constrained global credit markets.
Second-quarter net income fell to $16.6 million, or 8 cents per share, from from $141.1 million, or 59 cents per share, in the year-earlier quarter, the company said on Tuesday.
Excluding one-time charges Los Angeles-based CB Richard Ellis would have earned $33.2 million, or 16 cents per share, compared with $157.3 million, or 66 cents last year, still far from the 44 cents analysts on average had expected, according to Reuters Estimates.
"As we had anticipated, the leasing business turned down from the strong first quarter, especially in the Americas and the UK, reflecting weak economic activity and decreasing business confidence," Brett White, chief executive, said in a statement.
"Investment sales activity remained quite soft due to a broadening of the credit market turmoil and a continuing gap between buyer and seller expectations of property values. Decreased investment volumes have now become evident in all parts of the world."
Revenue fell to $1.3 billion from $1.5 billion and behind the $1.42 billion analysts had expected, according to Reuters Estimates.
The commercial real estate market has been hampered by the broader tightness in the credit markets. The company's two biggest markets, the United States and Britain have seen a dramatic fall-off in commercial real estate sales and a slowdown in demand for space.
One bright spot was the company's real estate outsourcing business, which overseas real estate needs for large global companies. That segment saw revenue rise 29 percent, accounting for one third of the Los Angeles-based company's global revenue. Also the Asia-Pacific region saw revenue rise 27.8 percent to $155.7 million.
But the larger regions were gloomy. In the Americas region, which includes the United States, Canada and Latin America, revenue fell 16 percent to $785.5 million. In Europe, Middle East and Africa, revenue fell 9.4 percent to $299.7 million.
In the Global Investment Management segment, which consists of investment management operations in the United States, Europe and Asia, revenue fell 49 percent to $42.7 million, compared with the second-quarter last year, which included performance fees from funds.
In addition, the second quarter of 2008 included a write down of $11.9 million for two investments whose market value declined.
(Reporting by Ilaina Jonas; Editing by Andre Grenon)
