CB Richard Ellis Group, Inc. (NYSE:CBG) reported yesterday (June 28, 2010) higher revenue and earnings for the second quarter ended June 30, 2010.
Net income on a US GAAP basis improved to US $54.8 million, or US $0.17 per diluted share, for the quarter, compared with a net loss of US $6.6 million, or US $0.02 loss per diluted share, in the second quarter of 2009.
Excluding selected charges, net income would have totaled US $58.8 million, or US $0.18 per diluted share, for the current-year quarter, compared to net income of US $9.7 million, or US $0.04 per diluted share, in the second quarter of 2009.
Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) more than doubled to US $161.6 million in the second quarter of 2010 from US $68.4 million a year earlier. Excluding selected charges, EBITDA rose 82% to US $165.2 million in the current period from US $90.9 million in the second quarter of 2009.
Revenue for the quarter totaled US $1.2 billion, an increase of 23% from US $955.7 million in the second quarter of 2009.
These results represent the Company's strongest quarterly year-over-year growth in revenue since the fourth quarter of 2007, and in EBITDA, excluding selected charges, since the first quarter of 2007.
"Our financial performance continued to strengthen across most business lines globally, and we have good momentum entering the year's second half," said Brett White, Chief Executive Officer of CB Richard Ellis.
"In the US, we saw a very strong pick up in property sales and leasing, reflecting recovering market conditions. Europe produced robust growth, fueled by the recovery of the property sales market in the larger economies, such as the UK, Germany and France. Asia Pacific also sustained the strong top-line growth that first became evident there late last year.
"We are mindful of concerns about the pace of economic recovery, but the rebound in commercial real estate activity is progressing. During the 2008-2009 downturn, we removed more than US $600 million of expense from our platform. We predicted then that even a modest recovery would produce outsized gains in profitability due to this cost reduction, and this is precisely the result we are now seeing. We are a very efficient, client-centric organization with a diversified revenue base, resulting in operating leverage that, as we saw in the second quarter, enables us to drive strong EBITDA growth and margin expansion."
Revenue rose at a double-digit rate across all major business lines, except Development Services, with property sales and leasing growing globally by 61% and 29%, respectively. The property sales recovery was particularly strong in Europe (up 93%) and Asia Pacific (up 67%). The Americas also saw revenue grow significantly in both the property sales (up 47%) and property leasing (up 37%) business lines. Reflecting increased liquidity in the real estate capital markets, commercial mortgage revenue rose 33% and loan origination volume improved 30% from the year-earlier quarter's very weak level.
Globally, outsourcing revenue, including property and facilities management, increased by 10% in the second quarter, its strongest growth since the third quarter of 2008. International outsourcing growth was once again very strong, with Asia Pacific and Europe posting revenue increases of 44% and 27%, respectively. The Company also achieved significant new business, signing 34 multi-year contracts, its highest quarterly total ever. This total included 17 new clients including Deere & Company, Genbrand and NYSE Euronext and 17 contract renewals or expansions, including Boeing, Chevron, Marathon Oil Corporation, Microsoft, Rockwell Automation, The Coca Cola Company, and the United States Department of State.
Although the market for distressed asset dispositions has developed more slowly than originally expected, the Company has continued to capture substantial opportunities in this sector. In the US, it is now marketing more than US $7.5 billion of distressed assets and has success