The world’s second largest property services firm suffered a 90% drop in first quarter earnings.
Jones Lang LaSalle said the fall was due to increased costs and the impact of the world liquidity crisis on its capital markets business.
Revenue up, profits down
The company saw profits slump from $27.3m (£13.6m) to $2.8m (£1.4m), or $0.09 a share, well below the analyst consensus forecast of $0.63 a share.
This was despite a 15% increase in revenue to $564m (£282m).
'The principle reason for the difference between the analyst consensus and our earnings was a larger than expected reduction in the revenue from capital markets and hotels transactions across all three regions,’ chief executive Colin Dyer said.
'We'd continue to stress the advantages of our diversified platform (geographically and by business line) as one of many strong performance metrics in place at our firm.’
Broadly in line
The earnings figure of $0.09 is broadly in line with previous years, with 2007 proving an exception. In 2006 the figure was $0.14 a share, and in 2005 it made a loss of $0.27 a share.
The Europe, Middle East and Africa region made a loss of $7m (£3.5m) compared to operating income of $14.5m (£7m) in 2007, however 2007 was again an exceptional year in that it was the first time the EMEA region had ever posted a positive first quarter income.
Revenue for EMEA fell 7% to $132m (£61m) as a result of reduced transaction volumes in capital markets.
Revenue from the division’s capital markets decreased 29% in the first quarter of 2008 excluding the performance fee generated from the significant portfolio transaction completed in Germany in 2007, while market volumes as a whole in Europe were down 38%.
