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Jones Lang LaSalle (JLL) Q1 FFO & Revenues Beat, Stock Dips

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Jones Lang LaSalle Inc. JLL reported first-quarter 2022 adjusted earnings of $3.47 per share, beating the Zacks Consensus Estimate of $2.05. The reported figure increased 65% from the prior-year quarter’s $2.10.

Revenues in the quarter totaled $4.8 billion, surpassing the Zacks Consensus Estimate of $4.4 billion. It was 19% higher than the year-ago quarter’s tally.

However, shares of JLL fell 3.12% during Monday’s regular trading session on the NYSE after the release of the first-quarter 2022 results as markets globally are facing a sell-off presently.

As part of the last phase of JLL’s Beyond transformation, effective Jan 1, 2022, the company changed its geographic-centric Real Estate Services segments of the Americas, EMEA and the Asia Pacific to global business line segments of Markets Advisory, Capital Markets, Work Dynamics and JLL Technologies.

JLL’s results reflect robust performance in the Capital Markets and Markets Advisory businesses. The quarterly adjusted EBITDA margin, calculated on a fee-revenue basis, was 14.4% (and local currency) compared with 13.3% in first-quarter 2021.

Behind the Headline Numbers

During the first quarter, the Market Advisory segment, revenues and fee revenues came in at $999.5 million and $741.2 million, respectively, reflecting a 26% and 34% (in USD) year-over-year jump. Fee revenues for Leasing improved 45% year over year to $596.9 million. This was fueled by higher transaction size and volumes in the United States, along with continued strength in the office and industrial sectors, resulting in improvement in revenues and fee revenues. Globally, all major asset classes in Leasing registered a double-digit growth year over year.

Revenues and fee revenues for the Capital Markets segment were $600.6 million and $591.5 million, respectively, marking a 46% and 50% (in USD) year-over-year rise. Growth in fee revenues was driven by higher investment sales and debt advisory transaction volumes in many regions across the globe.

JLL’s Work Dynamics segment reported revenues and fee revenues of $3.03 billion and $410.5 million, respectively, up 12% and 13% (in USD) year over year. This growth was led by new client acquisitions and expansion of existing client relationships, mainly in the technology and public institutions sectors in the United States under the Workplace Management segment. Project Management growth was driven by the return to office movement and fewer pandemic restrictions across the globe, thereby improving project demand.

JLL Technologies segment reported revenues and fee revenues of $49.4 million and $45.3 million, respectively, rising 14% and 52% (in USD) from the prior-year quarter levels. This top-line growth included $8.5 million of incremental fee revenues from acquisitions closed during the second half of 2021. Backed by new customers and growth from existing customers in software and solutions offerings, organic fee revenues increased 24% year over year.

Revenues and fee revenues in the LaSalle segment increased 30% and 31% (in USD) year over year to $118.3 million and $112 million, respectively. The rise in advisory fee was driven by strong capital raising along with valuation increases in assets under management while that for transaction fees was mainly due to a higher volume of asset acquisitions in Asia and Europe.

As of Mar 31, 2022, LaSalle had $77.8 billion of real estate assets under management (AUM), up 2% sequentially. The rise was attributable to an increase in acquisitions and net valuation, partially offset by dispositions and withdrawals and foreign currency decreases.

Balance Sheet

JLL exited first-quarter 2022 with cash and cash equivalents of $575.8 million, down from $593.7 million as of Dec 31, 2021.

Additionally, as of Mar 31, 2022, the company’s net debt amounted to $1.33 billion, marking an increase of $955.3 million sequentially and $660.9 million year over year. This increase resulted from typical seasonality and was mainly attributable to annual incentive compensation payments made in the first quarter.

In the reported quarter, the net leverage ratio was 0.8, up from 0.2 as of Dec 31, 2021, and 0.7 as of Mar 31, 2021. Corporate liquidity was $2.2 billion as of Mar 31, 2022.

During the first quarter, the company repurchased 615,331 shares for $150 million. Additionally, approximately $1.6 billion remained authorized for repurchase under the share buyback program as of Mar 31, 2022.

JLL currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Jones Lang LaSalle Incorporated Price, Consensus and EPS Surprise

Jones Lang LaSalle Incorporated Price, Consensus and EPS Surprise
Jones Lang LaSalle Incorporated Price, Consensus and EPS Surprise

Jones Lang LaSalle Incorporated price-consensus-eps-surprise-chart | Jones Lang LaSalle Incorporated Quote

Performance of Other Real Estate Stocks

CBRE Group Inc. CBRE reported first-quarter 2022 core earnings per share of $1.39, beating the Zacks Consensus Estimate of $1.10 and improving from the year-ago tally of 81 cents.

The quarterly results reflect the benefits of diversifying across asset types, business lines, client types and geographies as well as expanding the company’s resilient business in recent years.

CBRE Group generated revenues of $7.3 billion, up 23.5% year over year. However, revenues compared unfavorably with the Zacks Consensus Estimate of $7.7 billion. Net revenues jumped 30.3% (32.5% in local currency) year over year to $4.4 billion. Core EBITDA surged 56.5% (59.3% in local currency) to $732 million.

Realty Income Corporation’s O first-quarter 2022 adjusted FFO per share of 98 cents marginally surpassed the Zacks Consensus Estimate of 97 cents. The reported figure increased 14% from the prior-year quarter’s 86 cents.

Results reflect a better-than-expected improvement in revenues. The company benefited from expansionary effects and a healthy pipeline of opportunities globally.

O’s total revenues in the reported quarter came in at $807.3 million, exceeding the Zacks Consensus Estimate of $761.2 million. The top line also jumped 82.5% year over year.

Note: Funds from operations (FFO) is a widely used metric to gauge the performance of REITs.

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