Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Jones Long LaSalle (JLL 0.06%), a financial services firm that provides real estate and investment management services to real estate owners, developers, and investors worldwide, rocketed higher by as much as 15% after reporting its third-quarter earnings results last night after the closing bell.
So what: For the quarter, Jones Long LaSalle delivered revenue growth of 17% as fee service revenue (which comprises the majority of its business) improved by 15%. Adjusted EPS jumped 21% for the quarter to $1.49, handily trouncing the $1.34 that Wall Street had been forecasting. The company specifically saw its biggest gains in its capital market and hotel segment where revenue spiked 46% and in property and facility management where revenue improved 26%. It also delivered double-digit fee service revenue growth across all geographic regions.
Now what: This was a pretty impressive quarter and it has the potential to get even better with the company heading into what is traditionally its best quarter (Q4). As for me, I'm still a bit skeptical of Jones Long LaSalle's valuation here after today's run given its recent history of earnings inconsistencies -- it had missed estimates twice in the previous three quarters -- and the potential for a weakening in the real estate market in the U.S. once again if lending rates do rise. I'd certainly consider the company watchlist worthy after today's move, but I'm not convinced the real estate market, or investment servicing companies like Jones Long LaSalle, are where I'm looking for the best deals right now.
