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CBRE Group Q4 Results Top Estimates, Issues Rosy Outlook

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Commercial real estate services firm CBRE Group, Inc. (CBG: Quote) reported Wednesday a narrower year-over-year loss for the fourth quarter, reflecting lower acquisition-related costs and charges as well as double-digit revenue growth amid improved operational performance across all geographic regions.

Both adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also provided earnings guidance for the full-year 2013, above Street view.

"We are very pleased with our strong finish to 2012. Despite continued fiscal and economic uncertainty, all of our global operating regions delivered solid top-line growth in the fourth quarter. This growth was paced by the Americas, which benefited from particularly strong performance in our capital markets businesses," President and CEO Robert Sulentic said in a statement.

In early December, CBRE named Sulentic as president and CEO, effective December 1, to succeed Brett White and also to the board of directors. White also will remain on Board. Sulentic has been with the company since 2006 and most recently served as president and previously as CFO.

The Los Angeles, California-based company posted a net income of $173.0 million or $0.53 per share for the fourth quarter, higher than $79.76 million or $0.25 per share in the prior-year quarter.

Excluding items, adjusted net income was $181.91 million or $0.55 per share, compared to $149.27 million or $0.46 per share in the year-ago quarter.

On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.49 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter increased 14 percent to $2.01 billion from $1.76 billion in the same quarter last year, and topped five Wall Street analysts' consensus estimate of $1.87 billion.

CBRE's capital markets businesses, property sales and commercial mortgage brokerage, were top performers in the fourth quarter, with global property sales revenues rising 22 percent. Leasing revenues rose 5 percent globally, and outsourcing revenues also grew 13 percent globally.

Revenue for the Americas region, including the U.S., Canada and Latin America, grew 16 percent to $1.25 billion, and Europe, Middle East and Africa or EMEA region revenues, which mainly consists of operations in Europe, rose 7 percent to $357.45 million from the prior-year quarter.

In the Asia Pacific region, which includes operations in Asia, Australia and New Zealand, revenues increased 7 percent year-over-year to $248.85 million, and revenues for global investment management segment, which includes investment management operations in the U.S., Europe and Asia, grew 18 percent to $123.41 million from last year.

In the development services segment, which consists of real estate development and investment activities primarily in the U.S., revenues increased 35 percent to $28.44 million from a year ago.

For fiscal 2012, the company reported net income of $315.56 million or $0.97 per share, up from $239.16 million or $0.74 per share in the prior year. Excluding items, adjusted net income for the year was $399.41 million or $1.22 per share, compared to $334.50 million or $1.03 per share in the year ago. Revenues for the full year increased 10 percent to $6.51 billion from $5.91 billion in the previous year.

Street was looking for full-year 2012 earnings of $1.13 per share on annual revenues of $6.45 billion.

"Assuming the global economy plays out as anticipated, we expect to drive solid revenue and earnings increases in 2013. Further, we should see some margin expansion, even as we make greater investments in our people and platform that will enhance our competitive position and bolster long-term, profitable growth," Sulentic added.

Looking ahead to fiscal 2013, the company expects to generate adjusted earnings in the range of $1.40 to $1.45 per share. Analysts currently expect earnings of $1.36 per share for the full-year 2013.

CBG closed Wednesday's regular trading session at $21.85, down $0.06 or 0.27% on a volume of 3.45 million shares. However, the stock gained $0.75 or 3.43% in after-hours trading.

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by RTT Staff Writer

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