JLL Beats Q3 Earnings on Revenue Growth, Hikes Dividend - Analyst Blog

Helped by robust growth in fee revenues, Jones Lang LaSalle Inc. (JLL), which shortened its name to “JLL”, reported encouraging third-quarter 2014 adjusted earnings of $2.31 per share. Results comfortably exceeded the Zacks Consensus Estimate of $1.78 by nearly 30% and came well above the year-ago quarter figure of $1.49. The company has also announced a 9% hike in its semi-annual dividend rate.

 

Revenues came in at around $1.4 billion, considerably ahead of the Zacks Consensus Estimate of $1.1 billion and up 23% year over year. Consolidated fee revenue increased 19% from the prior-year quarter to $1.2 billion, driven by growth in Real estate and LaSalle Investment Management's advisory and incentive fees.

As a result, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) came in at $169 million, reflecting a year-over-year increase of 43%. Adjusted operating income margin (calculated on a fee-revenue basis) increased to 10.8% from 9.4% a year ago.

Quarter in Detail

Geographically, fee revenues from the Americas came in at $521.0 million, denoting a year-over-year increase of 16%. Fee revenues in the EMEA (Europe, the Middle East and Africa) region increased 9% from the prior-year quarter to $298.2 million, while in the Asia-Pacific region it rose 7% year over year to $218.5 million.

Moreover, revenues from LaSalle Investment Management segment more than doubled year over year to $162.4 million from $73.9 million. At the end of third-quarter 2014, assets under management amounted to $53.0 billion, up from $50.0 billion in the prior-quarter end.

Liquidity

JLL exited the third quarter with cash and cash equivalents of $162.6 million, up from $152.7 million at year-end 2013. Aided by its solid cash generation capabilities, the company reduced its net debt by $248 million from the year-ago quarter to $517 million.

Raises Dividend

Ushering in good news for its shareholders, JLL's board of directors declared a 9% hike in its semi-annual dividend to 25 cents per share from 23 cents paid earlier. This increased dividend will be paid on Dec 15, 2014, to shareholders at the close of business on Nov 14.

Our Viewpoint

Better-than-expected results at JLL keep us encouraged. Amid solid environment in the real estate market, we believe that strength in the company's Leasing and Property & Facility Management lines as well as LaSalle Investment Management business would help it ride on the growth trajectory.

JLL currently sports a Zacks Rank #1 (Strong Buy). Investors interested in the real estate industry may also consider stocks like Kennedy-Wilson Holdings, Inc. (KW), Sun Hung Kai Properties Ltd. (SUHJY) and Spirit Realty Capital, Inc. (SRC). All these stocks share the same rank as JLL.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
JONES LANG LASL (JLL): Free Stock Analysis Report
 
KENNEDY-WILSON (KW): Free Stock Analysis Report
 
SPIRIT REALTY (SRC): Free Stock Analysis Report
 
SUN HUNG KAI PR (SUHJY): Get Free Report
 
To read this article on Zacks.com click here.