Newmark profit down, revenue up

Net first-quarter income falls 52% from year-ago period

National /
May.May 07, 2020 01:12 PM
Newmark Grubb Knight Frank CEO Barry Gosin (Photo by Kelly Sullivan/Getty Images for BenchMarks)

Newmark Grubb Knight Frank CEO Barry Gosin (Photo by Kelly Sullivan/Getty Images for BenchMarks)

Newmark Group’s first-quarter profit fell 52 percent from a year ago even as revenue grew, said the company, which operates commercial real estate advisory firm Newmark Knight Frank, Thursday morning.

Revenue for the quarter was about $484 million, up 8.1 percent from the same period of 2019, when it was about $448 million. However, the pandemic only really began slowing down real estate activity in the second half of March.

Net income available to stockholders was just under $8.2 million, compared to about $16.9 million during the first quarter of last year, and earnings per share fell to three cents from eight cents.

The Real Deal ranked Newmark as the largest retail brokerage in Manhattan in 2019, but that already struggling sector has arguably been hit harder than any other by the pandemic. Major retailers including J. Crew and Neiman Marcus have already filed for bankruptcy.

Newmark’s stock price — like that of other real estate brokerages — tumbled in mid-March, dropping 36 percent to about $3 during a market selloff that prompted U.S. stocks to suspend trading several times. The share price has since ticked up and was trading at about $4 Thursday morning, far off its 52-week high of $13.85.

The company is withdrawing its previously issued outlook for 2020, given the uncertainty of the pandemic, and it has cut support and operational expenses by at least $100 million for the year, executives said on the earnings call.

“Given our highly variable expense structure, coupled with the changes we have implemented, Newmark will maintain its strong financial position during a potentially prolonged downturn,” CEO Barry Gosin said. “We have taken the steps necessary to thrive when the crisis abates.”


Related Articles

arrow_forward_ios
Extended Stay America CEO Bruce Haase (Extended Stay, HomeWell Francising)

Extended Stay America weathering pandemic better than rivals

Extended Stay America weathering pandemic better than rivals
Gov. Andrew Cuomo (Getty, iStock)

Cuomo to ease requirements for rent relief

Cuomo to ease requirements for rent relief
A federal judge has rejected a lawsuit from a group of New York landlords that sought to challenge pandemic protections for tenants. (iStock)

Landlords lose challenge against pandemic renter protections

Landlords lose challenge against pandemic renter protections
Foot traffic in Union Square, the Flatiron District and Chelsea is down by 50% from February. (Getty)

Foot traffic remains low in prime Manhattan neighborhoods

Foot traffic remains low in prime Manhattan neighborhoods
About 25 percent of employees had returned to work as of Nov. 18 (Getty; iStock)

Offices remain empty, and big cities are feeling the crunch

Offices remain empty, and big cities are feeling the crunch
Singapore (iStock)

Singapore luxury market rebounds despite fewer foreign buyers

Singapore luxury market rebounds despite fewer foreign buyers
The tax break allows foreign visitors to reclaim a sales tax of 20 percent on items bought in the country for more than £30 (Getty; Unsplash)

UK tax break expiration could hurt struggling retailers

UK tax break expiration could hurt struggling retailers
Cineworld Group CEO Mooky Greidinger and Regal Cinema (Photo via Getty; Wikipedia)

Regal Cinemas scores financial rescue package

Regal Cinemas scores financial rescue package
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...