CBRE first quarter profits halve

CB Richard Ellis saw net income fall from $65m (£32.5m) last year to $31.7m (£15.9m), or $0.15 a share, before accounting for one-off charges, which was below analysts’ consensus forecast of $0.21. Revenue was unchanged at $1.2bn (£600m).

Including one-off charges, which were higher last year than this, CBRE made net income of $20.5m (£10.2m).

CBRE blamed the fall in profits on two factors: ‘the timing of carried interest revenue recognition in the global investment management segment and the combined impact, in the EMEA segment, of a revenue mix shift and planned increase of costs associated with investment in growth of the business’.

The Europe, Middle East and Africa region had a tough first quarter.

Operating income fell by 76% from $34m (£17m) to $8m (£4m), although revenue increased 8% to $243m (£172m). ‘The current year quarter's lower operating income is mainly due to a shift in revenue mix from investment sales to outsourcing,’ CBRE said.

‘Generally, first-quarter 2008 results were in line with our expectations,’ said chief executive Brett White. ‘As anticipated, the weaker economy as well as the unsettled credit market environment materially impacted our capital markets businesses.

'Investment sales activity declined in the Americas and Europe due to limited credit availability.

'On the other hand, the quarter underscored our continuing success in diversifying the firm's revenue streams. Our outsourcing business grew substantially in every region worldwide.

‘In addition, the global leasing business produced strong growth. Leasing revenue rose significantly in every region although continued economic weakness in the U.S. and EMEA could reduce future leasing results.

'Asia Pacific performed exceptionally well during the quarter, with more than 40% top- and bottom-line growth, reflecting both the relatively muted effect, thus far, of credit market uncertainty as well as market share gains and an expansion of our service offering throughout the region.’