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CBRE Group, Inc. Reports Solid Revenue And Earnings Growth For The Second Quarter Of 2013

Stocks in this article: CBG

CBRE Group, Inc. (NYSE:CBG) today reported solid growth in revenue and earnings for the second quarter ended June 30, 2013.

Second-Quarter 2013 Results

  • Revenue for the quarter totaled $1.74 billion, an increase of 9% from $1.6 billion in the second quarter of 2012.
  • Excluding selected charges 1, net income 2 increased 16% to $101.8 million from $88.0 million in the second quarter of 2012, and earnings per diluted share increased 15% to $0.31 from $0.27 in the prior-year period. For the second quarter, selected charges (net of income taxes), which primarily related to costs associated with the Company’s recent corporate debt refinancing, totaled $31.9 million. For the same period in 2012, selected charges totaled $12.2 million, and were primarily related to the ING REIM businesses acquired in 2011.
  • On a U.S. GAAP basis, net income totaled $69.9 million, compared with $75.9 million for the second quarter of 2012. GAAP earnings per diluted share totaled $0.21, compared with $0.23 in last year’s second quarter. The costs associated with the Company’s corporate debt refinancing reduced GAAP earnings per diluted share by $0.08 for the quarter.
  • Excluding selected charges, Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) 3 increased 10% to $243.1 million from $220.9 million in the second quarter of 2012. EBITDA 3 (including selected charges) rose 14% to $240.5 million for the second quarter of 2013, from $211.8 million for the same period a year earlier. Selected charges in 2013 related to carried interest incentive compensation expense while selected charges in 2012 related to the integration of the acquired ING REIM businesses.
  • CBRE completed its 2013 corporate debt refinancing program in June, when it paid down all of its 11.625% senior subordinated notes ($450 million aggregate principal amount), due in 2017. As a result of all of its 2013 refinancing actions, the Company has meaningfully extended debt maturities, lowered annual interest expense by approximately $50 million and markedly increased its financial flexibility.

Management Commentary

“During the quarter, CBRE benefited from our balanced business mix and focus on serving our clients,” said Robert Sulentic, the Company’s president and chief executive officer. “Revenue grew solidly overall with meaningful improvement in all three geographic regions and continued strength in our global capital markets and occupier outsourcing businesses. This performance is especially noteworthy in light of continued weak global economic growth and heightened financial market volatility late in the quarter. In addition, as previously discussed, we also made significant incremental investments in our platform, which are designed to support future growth and better serve our clients.”

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