Real estate services provider CBRE Group Inc. reported a robust fourth quarter as property sales increased and the company expanded its asset management business.
The Los Angeles firm formerly known as CB Richard Ellis Group Inc. earns commissions from arranging transactions to buy or rent space in offices, warehouses and other commercial properties.
Property sales revenue rose 10% compared with the fourth quarter of 2010, powered by a growing number of deals in the United States and Asia, while sales in Europe remained flat, the company said Tuesday.
Income from leasing properties fell moderately as growth in European transactions was offset by a decline in leases the company helped sign in the U.S.
CBRE Group's revenue was lifted by a 14% increase in its outsourcing business, wherein the company manages property for private and public clients. Outsourcing contracts were signed in the fourth quarter with Unilever, Newell Rubbermaid Inc. and Britain's Foreign and Commonwealth Office.
The company announced that it now manages Microsoft Corp.'s 34-million-square-foot real estate portfolio, an expansion of its relationship with the Redmond, Wash., software giant.
"The Microsoft deal is huge," said analyst Craig Silvers, president of Bricks & Mortar Capital. "It exemplifies how even companies the size of Microsoft see it as more efficient to have a professional team like CBRE come in and do most of the work for them."
CBRE Group also profited in the fourth quarter from its growing real estate development business with the sales of two properties built by subsidiary Trammell Crow Co. in Texas.
"Our highly diversified portfolio was the key to our fourth-quarter results," Chief Executive Brett White said. "The macro-environment during this period was marked by intensified concerns about sovereign debt issues, particularly in Europe, and tepid economic growth."
Fourth-quarter profit was $79.8 million, or 25 cents a share, compared with $95.1 million, or 30 cents, in the last quarter of 2010. Excluding certain charges, profit would have been 46 cents a share, beating analysts' expectations by 2 cents. Revenue was $1.8 billion, an increase of 7%.
CBRE shares fell 34 cents to $19.26 before earnings were announced.