CB Richard Ellis Group Inc. posts double-digit revenue gains
Growth accelerated in the fourth quarter for the world’s largest commercial property brokerage as the economies improved in Asia and the United States and more companies made real estate decisions.
Los Angeles-based CB Richard Ellis Group Inc. exceeded Wall Street’s earnings expectations, posting double-digit gains Thursday in every global business line except real estate development services.
“Companies are trying to lock in real estate leases or buy property before prices get out of control,” said analyst Craig Silvers, president of Bricks & Mortar Capital.
Leasing-transaction revenue at CB Richard Ellis grew 35% and sales-transaction revenue grew 40% compared with a year earlier as credit became easier to obtain and investors became more optimistic, the company said.
Fourth-quarter profit was $95.1 million, or 30 cents a share, up 48% from $64.3 million, or 21 cents, a year earlier. Excluding one-time charges, profit would have been 36 cents a share, 2 cents more than the average of analysts’ expectations.
“We believe the market remains in the early stages of recovery, and we enter 2011 with excellent momentum in most business lines globally,” Chief Executive Brett White said. Revenue from real estate management contracts increased by 10%.
“The revenue growth was exceptional,” said analyst Will Marks of JMP Securities. “However, given the amount of revenue growth, we would have expected operating margins to expand and they remained flat.”
Contributing to the flatness was a $30-million expenditure for bonuses, reinstated earlier than anticipated.
“This decision was made in light of the very strong financial performance in this segment and the company overall,” the company said.
Shares of CB Richard Ellis fell 26 cents to $23.78 on Thursday, before the earnings were released, then rose 7% in after-hours trading.
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