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CBRE Group (NYSE:CBRE) reduced its 2023 outlook for core earnings as rising interest rates continued to weigh on real estate capital markets. Q3 core EPS, albeit topping expectations, dropped sequentially and from a year ago, driven by a persistent cooldown in property sales and debt financing activity.
This decline was exacerbated by delays in harvesting development assets which we will sell when market conditions improve,” said President and CEO Bob Sulentic.
The company now sees 2023 core EPS retreating by mid-30%, compared with the 20%-25% decline expected in the previous guidance.
Even so, "the company believes 2023 will be the trough for earnings," Sulentic noted.
Q3 core EPS of $0.72, surpassing the $0.67 consensus, fell from $0.82 in Q2 and from $1.13 a year ago. Revenue of $7.87B, vs. $7.42B consensus, advanced from $7.72B in Q2 and from $7.53B in the year-earlier period.
Shares of the commercial real estate services and investment company dipped 1.6% in Friday morning trading.
Total costs and expenses were $7.60B, up from $7.42B in Q2 and from $7.16B a year before.
Core EBITDA fell to $436M from $504M in Q2 and from $606M in Q3 of last year.
Free cash flow of $306M vs. -$86M in Q2 and $690M in Q3 2022.
During the quarter, CBRE (CBRE) repurchased about 6.2M shares for $516M, an average price per share of $83.03.
Earlier, CBRE Non-GAAP EPS of $0.72 beats by $0.05, revenue of $7.87B beats by $450M.