CBRE Group's (CBG) Q3 Earnings Beat, Revenues Rise Y/Y

Real estate services firm, CBRE Group Inc. (NYSE:CBG) reported third-quarter 2016 adjusted earnings of 50 cents per share, beating the Zacks Consensus Estimate of 48 cents. However, it lagged the prior-year quarter figure of 51 cents.

CBRE Group posted revenues of $3.19 billion, missing the Zacks Consensus Estimate of $3.29 billion. However, the top-line came in higher than $2.71 billion recorded a year ago.

Fee revenues were also up 9% year over year to $2.1 billion. However, excluding the Global Workplace Solutions business, revenues were up 2%, but fee revenues were almost unchanged.

Revenues Details

Revenues from the Americas increased 14% (14% in local currency) year over year to $1.77 billion during the quarter.

Revenues from the EMEA region (primarily Europe) grew 30% (39% in local currency) year over year to $956.5 million, while that from Asia-Pacific (including Asia, Australia and New Zealand) climbed 26% (23% in local currency) to $358.3 million.

In the Global Investment Management segment, revenues totaled $91.8 million, down 20% (16% in local currency) year over year. In the Development Services segment, revenues declined 11% (11% in local currency) to $16.5 million.

Liquidity

CBRE exited the third quarter with cash and cash equivalents of $446.3 million, down from $540.4 million as of Dec 31, 2015.

2016 Outlook Reaffirmed

CBRE Group reaffirmed the expected adjusted earnings per share for 2016 in the range of $2.15–$2.30. The current Zacks Consensus Estimate is $2.17, which lies within this range.

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).

Better-ranked stocks in the real estate space include PennyMac Mortgage Investment Trust (NYSE:PMT) , Sun Hung Kai Properties Limited (OTC:SUHJY) and RE/MAX Holdings, Inc. (NYSE:RMAX) . While both PennyMac Mortgage and Sun Hung Kai Properties sport a Zacks Rank #1 (Strong Buy), RE/MAX Holdings carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term expected earnings growth rates for PennyMac Mortgage, Sun Hung Kai Properties and RE/MAX Holdings are 3%, 6.38% and 8.50%, respectively.

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