CB Richard Ellis (CBRE) admitted in the US yesterday that it would miss current Wall Street estimates for its second-quarter profit by about 50%.
The company said its earnings for the second quarter will probably be 16 cents a share, compared with the consensus First Call estimate of 33 cents. It blamed the shortfall on weaker than expected sales and leasing revenues in April and May.
CBRE, which owns CB Hillier Parker in the UK, said it plans to restructure its US operation in an effort to cut costs by about $11m pa.
A spokesman was not available to say if CBRE would have to cut any of its 10,000 employees or take a charge against its earnings for the restructuring.
CBRE stock fell 2-3/16 to a three-month low of 17-1/4 on the New York Stock Exchange, where it was one of the worst performers. The shares have fallen 29% in the past three weeks alone.
Quarterly revenues will be 7% below analysts’ estimates and earnings before interest, taxes, depreciation, and amortization will be short by 19%, the company said, without giving exact Wall Street targets.
CBRE said the capital markets continued to be sluggish from last year and that was having a negative impact on its business. It also said that concerns over the strength of the US economy have led to a slowing in leasing commitments.
As part of the restructuring, nine business lines will be simplified into three: transaction services, which includes all buying, selling and leasing services; management services, which includes property and facilities management; and financial services, which includes capital markets, realty advisory, investment banking and valuation services.
EGi News 22/07/99
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