Commercial real estate services firm CB Richard Ellis Group, Inc. (CBG), Wednesday reported a slip to loss in the second quarter on charges and sharp decline in revenues. Though affected by weak performance from all its segment, revenues still came in above estimates for the quarter.
For the second quarter, net loss attributable to the Los Angeles, California-based company was $6.64 million or $0.02 per share, compared to a profit of $16.56 million or $0.08 per share in the same quarter a year ago. Net loss for the quarter was $13.71 million, compared to a profit of $14.08 million in the year-ago quarter.
Excluding one-time charges, net income would have been $9.7 million or $0.04 per share for the quarter, compared to $33.2 million or $0.16 per share in the similar period last year. The $22.5 million charges was mostly related to write-offs and other cost-containment actions.
On average, six analysts polled by Thomson Reuters expected earnings of $0.04 per share for the quarter. Analysts' estimate typically excludes one-time items.
Results included a gain of $2.93 million related to the disposition of real estate, compared to a $4.04 million gain recorded in the prior-year quarter. Results also included one-time expenses related to severance and office consolidation costs totaling $17 million, on implementation of cost-savings actions.
Revenues for the quarter declined to $955.67 million from $1.31 billion in the corresponding quarter of the prior year, however, exceeding Street estimates of $952.58 million.
Commenting on the results, Brett White, president and chief executive officer said, "Our second quarter results were in line with expectations."
Revenue for the Americas region, including the U.S., Canada and Latin America, was $601.6 million, down from $785.5 million in the same quarter a year ago.
Revenue for the EMEA region, comprising operations in Europe, plunged to $176.6 million from $299.7 million in the year-ago quarter.
In the preceding first quarter, CB Richard Ellis slipped to a loss of $36.69 million or $0.14 per share, on lower revenues reflecting weak performance in global sales. Revenues for the first quarter totalled $890.45 million, down from a year ago.
Amongst others in the industry, integrated real estate and investment management service provider Jones Lang LaSalle Inc. (JLL), in its first quarter, reported a slip to loss of $61.48 million or $1.78 per share, hurt by lower revenues, higher depreciation and amortization expenses, and restructuring charges. Revenues were down 12% at $494.21 million.
For the quarter under review, CB Richard Ellis said in the Asia Pacific region, which includes operations in Asia, Australia and New Zealand, revenue totaled $122.7 million, down from $155.7 million in the second quarter of 2008.
In the Global Investment Management segment consisting of investment management operations in the U.S., Europe and Asia, revenue totaled $32.6 million, compared with $42.7 million in the year-ago quarter.
In the Development Services segment, which relates to real estate development and investment activities primarily in the U.S., revenue dropped to $22.2 million from $31.2 million in the corresponding quarter last year.
During the second quarter, the company raised its cost containment target by an additional $100 million of annual operating cost saving. The company has now eliminated or targeted for elimination between $575 million and $600 million of operating costs.
CB Richard Ellis said it raised $150 million of equity and $450 million of senior subordinated notes during the quarter.
White added, "During the quarter we also raised $600 million in new capital, which we are using to lower our secured bank debt, obtain loan amortization and maturity extensions and ensure our financial strength throughout this economic downturn."
For the six months ended June 30, 2009, the company reported a net loss of $43.3 million or $0.16 per share, compared with net income of $37.0 million or $0.18 per diluted share in 2008. Adjusted net income totaled $2.2 million or $0.01 per share.
Net loss for the six-month period attributable to the company was $43.33 million or $0.16 per share, compared to a profit of $37.02 million on $0.18 per share in the year-ago period. Revenues dropped to $1.85 billion from $2.55 billion in the comparable period last year.
On March 25, 2009, brokerage JP Morgan Upgraded CB Richard Ellis shares to 'Overweight' from 'Neutral,' with a mean target of $13.00.
CBG closed Wednesday's regular trading at $9.93, down $0.49 or 4.70%, on a volume of 6.69 million shares. In the last 52-week period, the stock traded in the range of $2.34 to $18.65, with a three-month average volume of $6.99 million shares.
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