CBRE Q1 2023 Earnings Report
Key Takeaways
CBRE Group, Inc. reported financial results for the first quarter ended March 31, 2023. GAAP EPS declined 68% to $0.37, and Core EPS declined 34% to $0.92. Revenue was $7.411 billion, a 1.1% increase year-over-year.
First quarter results were slightly better than expected, led by resilient business elements and cost management.
Full-year 2023 earnings outlook maintained, with core earnings per share expected to decline by low-to-mid double digits, but exceed the prior peak in 2024.
Cyclically resilient businesses, including Global Workplace Solutions, loan servicing, and property management, rose nearly 10% and are expected to generate over 50% of business segment operating profit.
GWS had its strongest first quarter for new business since 2019, with pipeline rising to a record level.
CBRE
CBRE
CBRE Revenue by Segment
Forward Guidance
CBRE is maintaining its earnings outlook for full-year 2023, with core earnings per share expected to decline by low-to-mid double digits this year, but then exceed the prior peak in 2024.
Positive Outlook
- Benefits from the diversification of the business.
- Intense focus on cost management.
- Expectation that a recession this year will be moderate.
- Eventual easing of the Fed’s monetary policy will spur a rebound in economic activity in 2024.
- GWS pipeline rose to a record level with growth across nearly all key client sectors.
Challenges Ahead
- Pressure on transactional businesses is expected to intensify further this year.
- Uncertainty in the outlook is higher than 60 days ago.
- Non-core operating loss totaled $26 million, primarily due to the lower fair-value of the company’s investment in Altus Power, Inc.
- Sales revenue fell 41% due to severely constrained capital availability and especially difficult comparisons with first-quarter 2022.
- Most debt capital sources sharply curtailed their lending activity.
Revenue & Expenses
Visualization of income flow from segment revenue to net income