Summary
CBRE Group, Inc. (CBRE) reported its second quarter 2020 results, which were significantly impacted by the COVID-19 pandemic. Revenue for the quarter declined 5.8% year-over-year to $5.4 billion, primarily due to a substantial decrease in Advisory Services revenue stemming from lower sales and leasing activity. This decline was partially offset by growth in the Global Workplace Solutions segment, driven by its contractual nature, and a modest increase in Real Estate Investments revenue. Net income attributable to CBRE Group, Inc. decreased to $81.9 million from $223.7 million in the prior year's quarter. Despite the revenue decline, the company managed cost of revenue effectively, and operating, administrative, and other expenses were reduced, partly due to cost-saving initiatives and lower bonus expenses reflecting the challenging operating environment. The company highlighted workforce optimization efforts and cost containment measures in response to the pandemic. While liquidity remains strong with significant revolving credit facility capacity and cash on hand, the outlook for the remainder of 2020 is uncertain, with management expecting the effects of COVID-19 to continue adversely impacting financial performance. The company is actively managing its operations and expenses to navigate the challenging market conditions.
Financial Highlights
45 data points| Revenue | $5.38B |
| Cost of Revenue | $4.40B |
| Gross Profit | $981.85M |
| Operating Income | $94.17M |
| Net Income | $81.90M |
| EPS (Basic) | $0.24 |
| EPS (Diluted) | $0.24 |
| Shares Outstanding (Basic) | 335.13M |
| Shares Outstanding (Diluted) | 337.36M |
Key Highlights
- 1Revenue decreased by 5.8% to $5.4 billion for the three months ended June 30, 2020, compared to $5.7 billion for the same period in 2019, primarily due to the impact of COVID-19 on Advisory Services.
- 2Net income attributable to CBRE Group, Inc. decreased to $81.9 million ($0.24 per share) from $223.7 million ($0.66 per share) year-over-year.
- 3Global Workplace Solutions segment revenue increased by 8.3% to $3.7 billion, driven by growth in facilities management.
- 4Advisory Services segment revenue declined significantly by 28.7% to $1.6 billion, impacted by reduced sales and leasing activity.
- 5The company implemented workforce optimization and cost-saving measures, leading to a decrease in operating, administrative, and other expenses.
- 6Cash flow from operating activities improved significantly to $6.1 million for the first six months of 2020, compared to a use of $293.3 million in the prior year period, largely due to improved working capital management and tax refunds.
- 7As of June 30, 2020, the company had $2.3 billion in available borrowing capacity under its revolving credit facility and $1.1 billion in cash and cash equivalents.