Jones Lang beats analysts' expectations

Jones Lang LaSalle Inc., the world's second largest publicly traded commercial real estate broker, rose 17 percent after the company beat analysts' profit expectations.

Chicago-based Jones Lang yesterday reported earnings excluding items of $1.85 a share. Analysts in a Bloomberg survey had forecast a median of $1.10. An unforeseen rise in the company's property and investment management businesses partly accounted for the discrepancy, JMP Securities said in an e-mail.

"The upside came from management services revenue that was up 10 percent versus our 5 percent estimate, and investment management incentive fees of $26.5 million versus our expectation of close to zero," JMP Securities in San Francisco said. The firm rates the broker "market outperform."

Jones Lang lost 71 percent of its market value in the 12 months through yesterday as financial institutions worldwide recorded more than $1 trillion in mortgage-related losses and writedowns and slashed almost 270,000 jobs. Jones Lang and its competitors also confronted a combined 59 percent global drop in commercial property transactions to $495.9 billion last year, according to data provider Real Capital Analytics Inc.

Jones Lang rose $4.00 to $26.90 at 4:15 p.m. in New York Stock Exchange composite trading.

Low Expectations

Low expectations for the broker, better-than-expected leasing contracts in the Americas and cost cuts boosted Jones Lang's results, Brandon Dobell, an analyst at William Blair & Co. in Chicago said in an e-mail. Dobell rates the shares "outperform."

Jones Lang's net income fell to $41.5 million, or $1.17 a share before adjustments, from $105.4 million, or $3.16 a share, a year earlier, the Chicago-based company said yesterday in a statement.

Revenue dropped 7.5 percent to $797.1 million. In the Americas, it rose 26 percent to $315.5 million, and in the Europe, Middle East and Africa region it declined 26 percent to $243.1 million. In Asia Pacific, revenue declined 15 percent to $144.4 million.

The company also had $20 million in restructuring expenses including costs related to the 15 acquisitions it made in the year.

Charges the company took for integrating those acquisitions, cutting staff, and the change in its underlying earnings were all "difficult for the analysts to understand," Chief Executive Officer Colin Dyer said in an interview today.

"These are very hard times for the street to draw an accurate line on any business and real estate is very cyclical," he said.