Richard Ellis 1st-quarter net profit rises

NEW YORK: CB Richard Ellis Group Inc, the world's largest commercial real estate brokerage, said on Tuesday its quarterly net income rose as its property management business helped offset a decline in fees from property sales. But results missed Wall Street estimates in part because of greater-than-anticipated expenses in Europe, lower investment management revenues, and a one-time charge of $10.6 million from a write-down of its investment in CBRE Finance.

First-quarter net income increased to $20.5 million, or 10 cents per share, from $12.0 million, or 5 cents per share, in the year-earlier quarter. Excluding charges related to its acquisition of Trammell Crowe Co, Los Angeles-based CB Richard Ellis earned $31.7 million, or 15 cents per share, compared with $65 million, or 27 cents last year. The latest result trailed the average analyst expectation of 21 cents per share, according to Reuters Estimates. Revenue rose 1.4 percent to $1.23 billion, ahead of the average analyst target of $1.14 billion, according to Reuters Estimates.

Soaring mortgage defaults set off a broad credit crisis that virtually shut down the commercial mortgage-backed securities market, a rich source of funding for commercial real estate sales, and tightened most lending standards. A slowdown in the U.S. economy also put a crimp in demand to rent space. "As anticipated, the weaker economy as well as the unsettled credit market environment materially impacted our capital markets businesses," Chief Executive Brett White said in a statement.

"Investment sales activity declined in the Americas and Europe due to limited credit availability." The company's global leasing business also helped offset sales, although White said continued economic weakness in the United States and parts of Europe could hurt future leasing results. In the Americas region, which includes the United States, Canada and Latin America, revenue fell 1 percent to $783.5 million. Leasing and property management failed to offset the decline in revenue from sales. In Europe, Middle East and Africa, revenue rose 7.7 percent to $242.8 million. Revenue from Asia Pacific jumped 46.2 percent to $137.4 million.