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CBRE Group, Inc. Reports Improved Adjusted Earnings For The Third Quarter Of 2012

Stocks in this article: CBG

CBRE Group, Inc. (NYSE:CBG) today reported an 8% increase in adjusted earnings for the third quarter ended September 30, 2012.

Third-Quarter 2012 Results

  • Revenue for the quarter was $1.56 billion, up 1% (5% in local currency) from $1.53 billion in the third quarter of 2011.
  • Excluding selected charges 1, net income 2 was $83.6 million, or $0.26 per diluted share, for the current quarter, up 8% from $77.7 million, or $0.24 per diluted share, in the third quarter of 2011. For the current quarter, selected charges (net of income taxes), which primarily related to the acquisition of the ING REIM businesses (completed in 2011), cost containment expenses and an intangible asset impairment related to the discontinuation of a U.K. trade name, totaled $43.9 million. For the same period in 2011, selected charges totaled $13.9 million.
  • On a U.S. GAAP basis, net income was $39.7 million, or $0.12 per diluted share, for the third quarter of 2012 compared with $63.8 million, or $0.20 per diluted share, for the third quarter of 2011.
  • Excluding selected charges, Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) 3 increased marginally to $195.3 million for the third quarter of 2012 from $194.8 million a year earlier. EBITDA (including selected charges) was $163.6 million for the third quarter of 2012, compared with $179.0 million for the same period last year. For the current quarter, selected charges, which primarily related to the aforementioned acquisition of the ING REIM businesses, cost containment expenses and an intangible asset impairment, reduced EBITDA by $31.7 million. For the same period in 2011, selected charges totaled $15.8 million.

Management Commentary

“Many investors and occupiers turned more cautious in the third quarter. Concerns about Europe’s ongoing sovereign debt crisis and Asia’s slowing growth, which have been weighing on markets for most of the year, were heightened by unease about weakening corporate profit outlooks as well as U.S. fiscal policy and political uncertainty,” said Brett White, CBRE’s chief executive officer. “CBRE was not immune from these macro trends. Nevertheless, our strong brand, best-in-class professionals and diversified global platform enabled us to modestly improve on last year’s performance in this cautious market environment. We also continued to carefully manage expenses, and preserved our industry-leading margins. During the third quarter, we took steps to further align our cost base with reduced business volumes in certain parts of our business. This was particularly true in Europe, where the ongoing debt problems continue to adversely affect transaction activity, most notably in France.”

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