CBRE Group's (CBG) Q2 Earnings Beat, Revenues Rise Y/Y

Real estate services firm, CBRE Group Inc. (NYSE:CBG) reported second-quarter 2016 adjusted earnings of 52 cents per share, beating the Zacks Consensus Estimate of 51 cents and ahead of the prior-year tally of 42 cents. A year over year rise in revenues aided the results.

CBRE Group posted revenues of $3.21 billion, almost in-line with the Zacks Consensus Estimate. Revenues were much higher than the year-ago number of $2.39 billion.

Fee revenues were also up 25% to $2.1 billion. However, excluding the Global Workplace Solutions business, both revenues and fee revenues climbed 5% and 3%, respectively.

Revenues Rise in All Segments

Revenues from the Americas increased 24% (24% in local currency) year over year to $1.78 billion during the quarter.

Revenues from the EMEA region (primarily Europe) grew 64% (66% in local currency) year over year to $961.8 million, while that from Asia-Pacific (including Asia, Australia and New Zealand) climbed 36% (38% in local currency) to $356.3 million.

In the Global Investment Management segment, revenues totaled $95.7 million, up 2% (2% in local currency) year over year. In the Development Services segment, revenues grew 24% (24% in local currency) to $17.9 million.

Liquidity

CBRE exited second-quarter 2016 with cash and cash equivalents of $431.8 million, down from $540.4 million as of Dec 31, 2015.

2016 Outlook

CBRE has lowered the expected 2016 adjusted earnings per share range for the rest of the year to $2.15–$2.30 from the earlier guidance of $2.27–$2.37. This was due to the impact of Brexit on U.K. property transaction.

Our Viewpoint

Going forward, we believe the company would benefit from strategic in-fill acquisitions, transformational deals, and improvement in leasing, property sales and outsourcing business. Yet, uncertainties in certain global economies, stiff competition and unfavorable foreign currency movements remain as concerns.

CBRE Group currently has a Zacks Rank #4 (Sell).

Investors interested in the real estate industry may consider stocks like Henderson Land Development Co. Ltd. (OTC:HLDCY) , Kennedy-Wilson Holdings, Inc. (NYSE:KW) and The Liberty Braves Group (NASDAQ:BATRK) . All these stocks carry a Zacks Rank #2 (Buy).