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CB Richard Ellis earnings double on global activity, deal

July 31, 2007|Roger Vincent | Times Staff Writer

Real estate services company CB Richard Ellis Group Inc. on Monday reported that profit more than doubled in the second quarter of 2007 on strong commercial real estate transaction activity across the globe and a major acquisition.

The largest international commercial real estate brokerage is benefiting from a wave of U.S. investment into foreign real estate markets as real estate investment trusts that use its services grow more common in Europe, Japan and Hong Kong, said analyst Craig Silvers of investment advisor Bricks & Mortar Capital.

"They had excellent growth all around the world," Silvers said. "Their performance was fantastic."

The Los Angeles company's net income was $141.1 million, or 59 cents a share, compared with $64.3 million, or 27 cents, a year earlier and soundly beat Wall Street's expectations of 42 cents a share. Revenue increased 65% to $1.5 billion during the three-month period that ended June 30.

"We continue to experience strong revenue growth from all business lines and geographic regions," Chief Executive Brett White said.

Revenue in the Western Hemisphere was up more than 56%, aided by the $1.9-billion acquisition of Dallas-based Trammell Crow in December. Revenue was up 72% in Europe and almost 40% in Asia, where the Dallas firm was not a competitor.

Wall Street has recently been leery of companies that prosper through real estate transactions, Silvers said, because investors anticipate that property sales will dwindle in the months to come as interest rates rise and make borrowing money to buy property more costly.

"Investors are running scared from real estate," Silvers said. CB Richard Ellis "earnings have rocketed but the stock has gone nowhere."

Share prices have hovered around $35 most of the year. The company's shares closed up 90 cents Monday at $35.40 and climbed to $38.40 in after-hours trading.

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