About the Post

Author Information

CBRE Q4 earnings slide 2.1% on interest expenses

It also cites softer investment sales environment

(NEW YORK) CB Richard Ellis Group Inc, the world’s largest commercial real-estate broker by market value, said fourth-quarter profit fell 2.1 per cent on higher interest expenses.

Net income declined to US$122.4 million from US$125.1 million a year earlier, the Los Angeles-based company said on Tuesday in a statement distributed by Business Wire. Per share net income rose to 54 cents from 53 cents because of a stock buyback. Revenue increased 30 per cent to US$1.84 billion.

‘Our performance was especially strong over the first nine months of 2007 but moderated later in the year,’ Brett White, chief executive officer of CB Richard Ellis, said in the statement. ‘Fourth-quarter results were impacted by the softer investment sales environment brought about by the continuing difficulties in the credit markets.’ The broker paid US$118 million more last year in interest associated with financing its December 2006 acquisition of rival Trammell Crow Co. CB Richard Ellis earns nearly a third of its revenue from commissions on leasing commercial space and another 23 per cent from property management. US office building sales plunged as much as 50 per cent in the quarter on rising borrowing costs, according to New York- based Real Capital Analytics Inc.

CB Richard Ellis’ net income was projected to be 75 cents a share, according to a Bloomberg survey of two analysts. By that measure, the company missed estimates.

The broker reported net income, excluding items, of 63 cents a share, 10 cents less than the average estimate of eight analysts in a Bloomberg survey. That measure doesn’t conform with generally accepted accounting principles.

In the Americas, including the US, Canada and Latin America, CB Richard Ellis reported a 33 per cent increase in revenue to US$1.05 billion. European revenue rose 21 per cent to US$437.6 million and revenue from the Asia-Pacific region climbed 69 per cent to US$198.4 million, the broker said.

The company reported earnings after the close of US stock markets. CB Richard Ellis shares fell US$1.35, or 7.1 per cent, to US$17.75 at 4 pm in New York Stock Exchange composite trading. The stock is down 54 per cent in the past 12 months.

Jones Lang LaSalle Inc, the second-largest commercial real estate broker, last week report a 31 per cent profit gain on rising fees from investment and property management and on European property sales.

Jones Lang’s stock has fared better in the past year than CB Richard Ellis, which earns 65 per cent of its revenue from the Americas, a region where defaults on sub-prime mortgages have raised borrowing costs and made it harder for real estate investors to find lenders. Jones Lang gets about 31 per cent of its sales from clients in the Americas.

CB Richard Ellis has more than 24,000 employees in 300 offices worldwide. The company markets, sells and leases commercial real estate, manages property, appraises sites and manages real estate investments.


Source: Bloomberg (Business Times 7 Feb 08)


No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: