Yahoo Finance CBRE Group (CBRE) Q1 Earnings and Revenues Top Estimates
CBRE Group Inc.’s CBRE first-quarter 2023 core earnings per share (EPS) of 92 cents surpassed the Zacks Consensus Estimate of 81 cents. Quarterly revenues of $7.41 billion also compared favorably with the Zacks Consensus Estimate of $7.30 billion. Shares of CBRE have risen more than 6% so far.
However, on a year-over-year basis, the core EPS declined by 34%. Revenues managed to increase 1.1%. Despite the challenging macro environment, CBRE Group benefited from the diversification across asset types, business lines, client types and geographies and the expansion of its resilient business in recent years, as well as cost-containment efforts.
Net revenues decreased 4.5% (1.2% in local currency) year over year to $4.18 billion. Core EBITDA declined 27.2% (25.1% in local currency) to $533 million.
In the first quarter of 2023, CBRE completed five in-fill acquisitions for a total of $65 million in cash and deferred consideration. These included four in the GWS business.
According to Bob Sulentic, CBRE’s president and chief executive officer, “Although we anticipate pressure on our transactional businesses to intensify further this year, we are maintaining our earnings outlook for full-year 2023, with core earnings per share expected to decline by low-to-mid double digits this year, but then exceed the prior peak in 2024.”
Quarter in Detail
CBRE Group’s Advisory Services segment reported a year-over-year revenue decrease of 17.5% (15.1% in local currency) to $1.85 billion. Global leasing revenues fell 8% (6% in local currency), reflecting declines across all major property types, except retail. This decrease was driven by the Americas, where revenues fell 10% (same in local currency). Moreover, foreign currency headwinds shrouded growth in overseas markets.
Global sales revenues fell 41% (38% in local currency) amid much-constrained capital availability and difficult comparisons with the first quarter of 2022. Global mortgage origination revenues declined 51% (same in local currency) as most debt capital sources abruptly curbed their lending activity.
The Global Workplace Solutions (“GWS”) segment registered a year-over-year increase of 11.1% (14.8% in local currency) in revenues to $5.3 billion. Encouragingly, GWS experienced its strongest first quarter for new business since 2019, and the pipeline too rose to a record level, with growth across almost all major client sectors.
With significant growth in technology and healthcare clients, Facilities management net revenues increased 12% (16% local currency). Also, due to large project mandates, Project management net revenues rose 18% (23% local currency).
The Real Estate Investments segment experienced a decline of 21.1% (17% in local currency) in revenues to $224 million. At the end of the first quarter of 2023, assets under management decreased by $0.4 billion from year-end 2022 to $148.9 billion, reflecting lower asset values, which offset net capital inflows and a positive currency movement.
Balance Sheet Position
CBRE Group exited the first quarter of 2023 with cash and cash equivalents of $1.23 billion, down from $1.32 billion as of Dec 31, 2022.
As of Mar 31, 2023, CBRE Group had $3.7 billion in total liquidity. This comprised $1.2 billion in cash in addition to the ability to borrow a total of $2.5 billion under its revolving credit facilities, net of any outstanding letters of credit. The company’s net leverage ratio was 0.56 as of the same date, significantly less than CBRE’s primary debt covenant of 4.25X.
During the March-end quarter, the company repurchased 1.4 million shares at an average price of $83.48, spending around $114 million. As of Mar 31, 2023, it had $2.0 billion of stock-repurchase capacity remaining under its authorized buyback program.
Currently, CBRE Group carries a Zacks Rank #3 (Hold).
CBRE Group, Inc. Price, Consensus and EPS Surprise
CBRE Group, Inc. price-consensus-eps-surprise-chart | CBRE Group, Inc. Quote
Upcoming Releases
It’s time to look forward to two stocks from the real estate operation industry — Jones Lang LaSalle Incorporated JLL and Cushman & Wakefield plc CWK. Both Jones Lang LaSalle and Cushman & Wakefield are slated to report quarterly numbers on May 4.
The Zacks Consensus Estimate for Jones Lang LaSalle’s first-quarter 2023 EPS stands at $1.70, suggesting a year-over-year decrease of 51.01%. JLL currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Cushman & Wakefield’s first-quarter 2023 EPS is pegged at 19 cents, implying a year-over-year decrease of 60.4%. CWK currently carries a Zacks Rank of 4 (Sell).
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