Shares in the world's largest real estate broker CB Richard Ellis Group Inc. plunged more than 20 percent early Wednesday after the firm posted disappointing second quarter earning.
Second-quarter net income plunged 88 percent to $16.6 million, or 8 cents per share, from $141 million, or 59 cents per share. Analysts' were expecting profit of 44 cents per share, according to Reuters Estimates. The drop was due mainly to lower brokerage fees from sales that have all but dried up due to the severely constricted global credit market.
The El Segundo-based company also reported revenues of $1.3 billion, a 13 percent decline from the same period a year earlier and below Wall Street's expectations of $1.42 billion.
CBRE said revenues declined in the Americas, Europe, the Middle East and Africa. The lone increase was in Asia, CBRE said. The tighter lending standards have made borrowing for commercial real estate purchases difficult, too expensive or just simply impossible, the firm said. In the U.S., revenues from commercial real estate dropped by 70 percent.
Shares in CBRE were down 20 percent to $14.96 in early trading Wednesday.
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