Summary
CBRE Group, Inc. (CBRE) reported its third-quarter 2019 financial results, showing robust revenue growth driven by its Global Workplace Solutions and Advisory Services segments. Total revenue increased by 12.6% year-over-year for the quarter and 11.5% for the first nine months, largely due to strong organic growth across key service lines, despite a negative impact from foreign currency translations. While revenue showed a healthy increase, net income attributable to CBRE Group, Inc. decreased for both the quarter and the nine-month period compared to 2018. This was primarily influenced by a significant one-time gain recognized in the prior year related to an investment remeasurement and a $89 million intangible asset impairment charge in the Real Estate Investments segment during the nine months of 2019. The company also reported a lower effective tax rate in 2019 due to a tax benefit in a foreign subsidiary. CBRE continues to demonstrate strong operating leverage, with operating expenses as a percentage of revenue decreasing. The company also highlighted its ongoing stock repurchase program, announcing an additional $100 million authorization, bringing the total under the new program to $400 million. The acquisition of Telford Homes Plc, announced in July 2019, closed on October 1, 2019, further expanding its Real Estate Investments segment in the London area.
Financial Highlights
46 data points| Revenue | $5.93B |
| Cost of Revenue | $4.69B |
| Gross Profit | $1.24B |
| Operating Income | $316.63M |
| Net Income | $256.60M |
| EPS (Basic) | $0.76 |
| EPS (Diluted) | $0.75 |
| Shares Outstanding (Basic) | 336.20M |
| Shares Outstanding (Diluted) | 341.10M |
Key Highlights
- 1Consolidated revenue increased by 12.6% for the three months ended September 30, 2019, reaching $5.9 billion, compared to $5.3 billion in the prior year period. For the nine months ended September 30, 2019, revenue grew 11.5% to $16.8 billion.
- 2Net income attributable to CBRE Group, Inc. decreased to $256.6 million for the third quarter of 2019 from $290.5 million in the prior year quarter, primarily impacted by a significant one-time gain in the prior year and an intangible asset impairment charge in 2019.
- 3The Global Workplace Solutions segment showed strong performance with revenue up 15.3% for the quarter, and Advisory Services also experienced growth, driven by property and advisory project management, sales, and commercial mortgage origination.
- 4An intangible asset impairment of $89.0 million was recorded in the Real Estate Investments segment during the nine months ended September 30, 2019, due to a review of anticipated cash flows and a decrease in assets under management in its public securities business.
- 5The company's effective tax rate decreased from 24.6% in Q3 2018 to 19.7% in Q3 2019, primarily due to a net tax benefit recognized in a foreign subsidiary.
- 6CBRE continued its share repurchase program, with an additional authorization of $100 million, bringing the total authorized amount under the new program to $400 million. As of November 6, 2019, approximately $300 million remained under this program.
- 7The acquisition of Telford Homes Plc, a multifamily residential property developer in London, was completed on October 1, 2019, expanding CBRE's Real Estate Investments segment.