CBRE Group Inc. Earnings: Fifth Straight Quarter of Shrinking Margins as Net Income Falls

S&P 500 (NYSE:SPY) component CBRE Group Inc. (NYSE:CBG) reported its results for the fourth quarter. CB Richard Ellis Group is a commercial real estate services firm which serves the occupiers, owners, lenders, and investors of multi-family and other commercial real estate.

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CBRE Group Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for CBRE Group Inc. fell to $79.8 million (25 cents per share) vs. $95.1 million (30 cents per share) a year earlier. This is a decline of 16.2% from the year earlier quarter.

Revenue: Rose 6.8% to $1.76 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CBRE Group Inc. reported adjusted net income of 46 cents per share. By that measure, the company beat the mean estimate of 44 cents per share. It fell short of the average revenue estimate of $1.86 billion.

Quoting Management: “2011 was a year of unexpectedly tough operating conditions in many parts of the world, particularly in the back-half of the year. Nevertheless, we recorded our second-best year ever for both revenues and normalized EBITDA, enhanced our platform with the ING REIM acquisitions and strategic recruiting, and made other investments that will further position CBRE for leadership across market cycles,” said Brett White, chief executive officer of CBRE.

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell 0.8 percentage point to 42.8% from the year earlier quarter. Over that time, margins have contracted on average 0.6 percentage point per quarter on a year-over-year basis.

Revenue has risen the past four quarters. Revenue increased 21.2% to $1.53 billion in the third quarter. The figure rose 21.4% in the second quarter from the year earlier and climbed 15.5% in the first quarter from the year-ago quarter.

The company beat estimates last quarter after being in line with expectations in the third quarter with net income of 24 cents per share.

Looking Forward: Expectations for the first quarter of the next fiscal year have not changed from 15 cents. The average estimate for the fiscal year is $1.01 per share, a rise from $1 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com