CB Richard Ellis Group Inc. (CBG), reported fourth-quarter 2010 revenues of $1.7 billion compared with $1.3 billion in the year-earlier quarter, reflecting an increase of 27% – the highest year-over-year quarterly revenue growth since fourth quarter 2007. The revenues in the reported quarter beat the Zacks Consensus Estimate of $1.5 billion.
The company reported a net income of $95.1 million or 30 cents per share during the quarter, compared with $64.3 million or 21 cents in the year-ago period. Excluding non-recurring items, CB Richard Ellis reported a net income of $115.4 million or 36 cents per share during the quarter compared with $86.0 million or 28 cents in the year-earlier quarter. The fourth quarter recurring earnings also surpassed the Zacks Consensus Estimate by 2 cents.
For full year 2010, the company reported revenues of $5.1 billion compared with $4.2 billion in 2009, reflecting a year-over-year increase of 23%. CB Richard Ellis is the world’s largest commercial real estate services firm in terms of 2010 revenue. The revenues in the reported fiscal exceeded the Zacks Consensus Estimate of $5.0 billion.
For fiscal 2010, the company reported a net income of $200.3 million or 63 cents per share, compared with $33.3 million or 12 cents in 2009. Excluding non-recurring items, CB Richard Ellis’ net income more than doubled in 2010 to $239.8 million or 75 cents per share, compared with $109.8 million or 39 cents in the previous year. The fiscal recurring earnings surpassed the Zacks Consensus Estimate by 3 cents.
Fourth quarter 2010 EBITDA (earnings before interest, tax, depreciation, and amortization) increased 44% to $241.0 million, compared to $167.1 million in the year-ago quarter. For full year 2010, EBITDA increased 74% to $647.5 million, compared to $372.1 million in 2009. The better-than-expected results were primarily due to improved performance across almost all geographic regions and business lines.
CB Richard Ellis witnessed robust global property sales and leasing activities during the quarter buoyed by its leading market position in the world’s major business centers. Global property sales revenue surged 40% year-over-year during fourth quarter 2010, as credit availability became wide and broad investor sentiment improved. CB Richard Ellis signed 34 long-term real estate outsourcing contracts (including 18 new clients) during the quarter. Global leasing revenue increased 35% during the quarter as market fundamentals continued to stabilize and demand for space rebounded.
Geographically, revenue growth during the quarter was led by the Americas– the largest business segment of the company. Revenue in the Americas increased 35%, driven by robust growth in both property sales (66%) and leasing (45%). In the Asia Pacific region, revenue rose 18%, powered by strong increases in India and China. Revenues for the EMEA (Europe, Middle Eastand Africa) region grew by 7% year-over-year due to continued strong growth in property sales in core markets, particularly in the U.K.and France.
The Global Investment Management segment, comprising investment management operations in the U.S., Europe and Asia, reported revenues of $79.8 million during the quarter compared with $38.7 million in the year-earlier quarter. Assets under management totaled $37.6 billion at the end of the quarter, up 8% from year-end 2009. During the quarter, Development Services segment, that includes real estate development and investment activities primarily in the U.S., reported revenues of $17.4 million compared with $24.5 million in the year-ago quarter. The development pipeline of the company totaled $4.9 billion at year-end 2010.
The gradual revival in the overall economy has enabled the company to drive its growth engine and management further expects to retain the momentum in 2011 as well. We also remain encouraged by indications of stabilization and recovery of market conditions. At year-end 2010, CB Richard Ellis had cash and cash equivalents of $506.6 million compared to $741.6 million in the year-earlier period.
For full year 2011, the company expects recurring earnings in the range of $0.95 to $1.05 per share. We maintain our ‘Outperform’ recommendation on the stock, which presently has a Zacks #2 Rank that translates into a short-term ‘Buy’ rating. Meanwhile, we have a ‘Neutral’ recommendation and a Zacks #2 Rank for Jones Lang Lasalle Inc. (JLL), one of the competitors of CB Richard Ellis.
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