JLL Raises Profit Target as Leasing Growth Accelerates
Second-quarter revenue rose 10% in local currency to $6.93 billion.
Jones Lang LaSalle Incorporated (JLL), the commercial real estate services company, doubled diluted earnings to $4.59 a share in the second quarter as leasing activity accelerated.
The quarter extended the first-quarter recovery while producing faster profit growth. Adjusted EBITDA rose 33% in local currency to $386.3 million, accelerating from 24% growth in the prior quarter, and adjusted earnings increased 61% to $5.26 a share.
Revenue rose 10% in local currency from a year earlier, compared with 9% growth in the first quarter. Advisory revenue growth accelerated to 21% from 17%, while growth in the company's Resilient businesses improved to 8% from 7%.
Leasing Advisory led the advance, with revenue rising 24% in local currency to $836.9 million, up from 16% growth in the first quarter. Higher transaction volume and a significant increase in average deal size drove the result. Global office-leasing revenue grew 20% against 2% market-volume growth, while U.S. revenue rose 24% against a 12% market increase.
Capital Markets Services revenue growth eased to 19% from 21% in the first quarter, though adjusted EBITDA climbed 74% to $95.2 million and margins expanded. Debt advisory grew 44%, equity advisory rose 53% and investment sales increased 20%. The comparison also benefited from the absence of a $14 million loan-loss expense recorded a year earlier.
Real Estate Management Services growth improved to 8%, supported by a pickup in Workplace Management to 10%. Project Management growth slowed to 3% from 10% in the prior quarter. Investment Management returned to 1% growth, though incentive and transaction fees fell 13% and assets under management were essentially unchanged sequentially at $86.8 billion.
Operating cash flow rose 47% to $488.1 million and free cash flow increased 52% to $438.0 million, reversing the outflows recorded in the first quarter. The cash generation helped reduce net debt by $298.8 million sequentially to $1.19 billion and lowered the net leverage ratio to 0.7 times.
JLL raised its full-year adjusted-earnings target range, which implies 34% year-over-year growth at the midpoint. The company repurchased $110 million of shares during the quarter, bringing first-half purchases to $410 million, with $2.6 billion remaining under its authorization.