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CBRE Group (CBRE) Q4 Earnings & Revenues Beat Estimates
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CBRE Group Inc. (CBRE - Free Report) reported fourth-quarter 2021 adjusted earnings per share (EPS) of $2.19, which beat the Zacks Consensus Estimate of $1.77 and increased from the year-ago tally of $1.45.
Quarterly results reflect the benefits of diversifying across asset types, business lines, client types and geographies as well as expanding the company’s resilient business in recent years. A healthy balance sheet and supportive macro environment also benefited CBRE Group.
The company generated revenues of $8.55 billion, outpacing the Zacks Consensus Estimate of $8.12 billion. Revenues also compared favorably with the year-ago quarter’s $6.9 billion. Net revenues jumped 35% (34.9% in local currency) year over year to $5.6 billion. Adjusted EBITDA surged 49.0% (49.5% in local currency) to $1.12 billion.
For full-year 2021, the company reported adjusted EPS of $5.80, up from the prior year’s $3.27. Revenues of $27.7 billion moved 16.5% north year over year.
During the quarter, CBRE acquired 60% of the ownership interest in Turner & Townsend Holdings Limited for $1.27 billion, net of cash received. Moreover, CBRE Group’s in-fill acquisitions aggregated $37.5 million in cash and deferred consideration during the fourth quarter.
Quarter in Detail
CBRE Group’s Advisory Services segment reported a year-over-year revenue increase of 42.6% (42.8% in local currency) to $3.3 billion. The results highlight revenue growth across most business lines, led by high-margin property sales and leasing, along with cost-mitigation efforts taken in 2020. Operating profit came in at $744 million, significantly up from the year-ago period’s $526 million.
Global sales revenues jumped a whopping 73% (74% in local currency) from the year-ago quarter’s levels. Global property sales revenues also came in 45% higher than the fourth-quarter 2019 peak. Global leasing revenues climbed 60% (same in local currency) year over year and 14% from fourth-quarter 2019 peak level and gained from continued strong industrial property demand.
The Global Workplace Solutions (GWS) segment registered a year-over-year increase of 12.1% (11.9% in local currency) in revenues to $4.8 billion. Exclusive of $194 million of revenues from Turner & Townsend, legacy GWS revenues increased 8% (7% in local currency). Operating profit increased 10.2% (10.6% in local currency) to $198 million. Facilities management experienced 6% (5% in local currency) growth in revenues, highlighting increased activity with local clients. The continued rebound in construction activity and capital spending projects aided project management revenues, which increased 17% (same in local currency), excluding Turner & Townsend contributions.
The Real Estate Investments segment recorded a 43.1% (42.0% in local currency) jump in revenues to $413 million from the year-ago quarter. Operating profit increased 33.4% (32.9% in local currency).
At the end of the fourth quarter of 2021, assets under management (AUM) reached a record high for the company and aggregated $141.9 billion, underlining growth of 7% from the third quarter of 2021. This highlights gains in asset valuations and positive net inflows. Importantly, more than 80% of the AUM is invested in assets other than the office.
Balance-Sheet Position
CBRE Group exited 2021 with cash and cash equivalents of $2.4 billion, up from $1.9 billion as of Dec 31, 2020.
As of Dec 31, 2021, the company had $5.5 billion in total liquidity. This comprised $2.3 billion in cash in addition to the ability to borrow a total of $3.2 billion under its revolving credit facilities, net of any outstanding letters of credit. The company’s net leverage ratio was (0.24) as of the same date. This is significantly less than CBRE’s primary debt covenant of 4.25X.
During the December-end quarter, the company repurchased 1.8 million shares at an average price of $102.72, spending around $184.6 million. As of Feb 23, 2022, it had $1.9 billion of stock-repurchase capacity.
Guidance
Backed by solid performance in 2021 and future growth prospects, CBRE Group now expects the average annual core adjusted EPS growth to exceed 20%, in the absence of any recession, for the period from 2020 to 2025. For the period from 2021 to 2025, CBRE projects the average annual growth rate to be in the low double digits. Potential incremental capital allocation can offer a meaningful upside to expected growth rates.
We now look forward to the results of other companies in the real estate sector like Jones Lang LaSalle Incorporated (JLL - Free Report) and The Howard Hughes Corporation , which are slated to be out on Feb 28.
The Zacks Consensus Estimate for Jones Lang LaSalle’s fourth-quarter 2021 EPS currently stands at $6.68 on revenues of $5.51 billion. Jones Lang LaSalle currently has a Zacks Rank of 2.
The consensus mark for The Howard Hughes Corporation’s fourth-quarter 2021 EPS is currently pegged at $1.63 on revenues of $622.4 million. The Howard Hughes Corporation has a Zacks Rank of 3 (Hold).
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CBRE Group (CBRE) Q4 Earnings & Revenues Beat Estimates
CBRE Group Inc. (CBRE - Free Report) reported fourth-quarter 2021 adjusted earnings per share (EPS) of $2.19, which beat the Zacks Consensus Estimate of $1.77 and increased from the year-ago tally of $1.45.
Quarterly results reflect the benefits of diversifying across asset types, business lines, client types and geographies as well as expanding the company’s resilient business in recent years. A healthy balance sheet and supportive macro environment also benefited CBRE Group.
The company generated revenues of $8.55 billion, outpacing the Zacks Consensus Estimate of $8.12 billion. Revenues also compared favorably with the year-ago quarter’s $6.9 billion. Net revenues jumped 35% (34.9% in local currency) year over year to $5.6 billion. Adjusted EBITDA surged 49.0% (49.5% in local currency) to $1.12 billion.
For full-year 2021, the company reported adjusted EPS of $5.80, up from the prior year’s $3.27. Revenues of $27.7 billion moved 16.5% north year over year.
During the quarter, CBRE acquired 60% of the ownership interest in Turner & Townsend Holdings Limited for $1.27 billion, net of cash received. Moreover, CBRE Group’s in-fill acquisitions aggregated $37.5 million in cash and deferred consideration during the fourth quarter.
Quarter in Detail
CBRE Group’s Advisory Services segment reported a year-over-year revenue increase of 42.6% (42.8% in local currency) to $3.3 billion. The results highlight revenue growth across most business lines, led by high-margin property sales and leasing, along with cost-mitigation efforts taken in 2020. Operating profit came in at $744 million, significantly up from the year-ago period’s $526 million.
Global sales revenues jumped a whopping 73% (74% in local currency) from the year-ago quarter’s levels. Global property sales revenues also came in 45% higher than the fourth-quarter 2019 peak. Global leasing revenues climbed 60% (same in local currency) year over year and 14% from fourth-quarter 2019 peak level and gained from continued strong industrial property demand.
The Global Workplace Solutions (GWS) segment registered a year-over-year increase of 12.1% (11.9% in local currency) in revenues to $4.8 billion. Exclusive of $194 million of revenues from Turner & Townsend, legacy GWS revenues increased 8% (7% in local currency). Operating profit increased 10.2% (10.6% in local currency) to $198 million. Facilities management experienced 6% (5% in local currency) growth in revenues, highlighting increased activity with local clients. The continued rebound in construction activity and capital spending projects aided project management revenues, which increased 17% (same in local currency), excluding Turner & Townsend contributions.
The Real Estate Investments segment recorded a 43.1% (42.0% in local currency) jump in revenues to $413 million from the year-ago quarter. Operating profit increased 33.4% (32.9% in local currency).
At the end of the fourth quarter of 2021, assets under management (AUM) reached a record high for the company and aggregated $141.9 billion, underlining growth of 7% from the third quarter of 2021. This highlights gains in asset valuations and positive net inflows. Importantly, more than 80% of the AUM is invested in assets other than the office.
Balance-Sheet Position
CBRE Group exited 2021 with cash and cash equivalents of $2.4 billion, up from $1.9 billion as of Dec 31, 2020.
As of Dec 31, 2021, the company had $5.5 billion in total liquidity. This comprised $2.3 billion in cash in addition to the ability to borrow a total of $3.2 billion under its revolving credit facilities, net of any outstanding letters of credit. The company’s net leverage ratio was (0.24) as of the same date. This is significantly less than CBRE’s primary debt covenant of 4.25X.
During the December-end quarter, the company repurchased 1.8 million shares at an average price of $102.72, spending around $184.6 million. As of Feb 23, 2022, it had $1.9 billion of stock-repurchase capacity.
Guidance
Backed by solid performance in 2021 and future growth prospects, CBRE Group now expects the average annual core adjusted EPS growth to exceed 20%, in the absence of any recession, for the period from 2020 to 2025. For the period from 2021 to 2025, CBRE projects the average annual growth rate to be in the low double digits. Potential incremental capital allocation can offer a meaningful upside to expected growth rates.
Currently, CBRE Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CBRE Group, Inc. Price, Consensus and EPS Surprise
CBRE Group, Inc. price-consensus-eps-surprise-chart | CBRE Group, Inc. Quote
Upcoming Releases
We now look forward to the results of other companies in the real estate sector like Jones Lang LaSalle Incorporated (JLL - Free Report) and The Howard Hughes Corporation , which are slated to be out on Feb 28.
The Zacks Consensus Estimate for Jones Lang LaSalle’s fourth-quarter 2021 EPS currently stands at $6.68 on revenues of $5.51 billion. Jones Lang LaSalle currently has a Zacks Rank of 2.
The consensus mark for The Howard Hughes Corporation’s fourth-quarter 2021 EPS is currently pegged at $1.63 on revenues of $622.4 million. The Howard Hughes Corporation has a Zacks Rank of 3 (Hold).