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Mar 31, 2024
CBRE Q1 2024 Earnings Report
CBRE's financial performance for Q1 2024 was reported, with core earnings exceeding expectations due to solid net revenue growth, particularly in leasing, while property sales were impacted by persistent inflation and high interest rates. Actions have been initiated to align costs with revenue trajectory in the Global Workplace Solutions segment.
Key Takeaways
CBRE Group, Inc. reported financial results for the first quarter ended March 31, 2024. GAAP EPS was up 10% to $0.41, while Core EPS was down 15% to $0.78. Revenue increased by 7.1% to $7,935 million. The company expects to generate core earnings per share in the range of $4.25 to $4.65 in 2024.
Global leasing revenue rose 4%, driven by office leasing growth.
Global sales revenue declined 11% due to high interest rates and tight credit conditions, except in EMEA where sales revenue increased by 8%.
Mortgage origination revenue jumped 34% due to higher loan fees and interest earnings on escrow balances.
Global Workplace Solutions segment delivered double-digit net revenue growth, but margins fell short of expectations.
CBRE
CBRE
CBRE Revenue by Segment
Revenue by Segment
Advisory Services Revenue
CapyFin.comBuilding Ops & Experience Revenue
CapyFin.comProject Management Revenue
CapyFin.comReal Estate Investments Revenue
CapyFin.com Forward Guidance
CBRE expects to generate core earnings per share in the range of $4.25 to $4.65 in 2024.
Positive Outlook
- Resilient Businesses’ continued strong performance
- Rapid actions on costs
- Advisory Segment remains on track to achieve its growth target
- Global leasing revenue rose 4% (same local currency), exceeding expectations.
- Even with a second consecutive quarter of very strong business wins, the pipeline remained elevated.
Challenges Ahead
- Persistent inflation kept interest rates higher than expected, which led to underperformance in our property sales transaction activity.
- Margins fell short of expectations in Global Workplace Solutions.
- Weak operating leverage in the quarter reflected certain one-time expenses, including higher-than- anticipated medical claims, and increased costs, which the company is now focused on substantially reducing.
- Sales activity remained under pressure from high interest rates and tight credit conditions.
- Non-core operating loss totaled $71 million, primarily due to the lower value of the company’s investment in Altus Power, Inc.
Revenue & Expenses
Visualization of income flow from segment revenue to net income