Calabasas commercial real estate brokerage Marcus & Millichap Inc. (MMI) reported results for the fourth quarter and full year that beat Wall Street expectations.
The firm said fourth-quarter net income was $17 million (44 cents a share) on revenue of $189 million. A year ago, net income was $20 million (51 cents a share) on revenue of $203 million. Marcus & Millichap attributed the 7 percent drop in revenue to “out-sized growth” in the year-ago period, and in part to rising, post-November election interest rates. Despite the drop, earnings still beat analysts expected 42 cents a share on $187 million of revenue, according to Thomson Financial Network.
Full-year net income was $65 million ($1.66 a share) on revenue of $718 million, compared to $66 million ($1.69 a share) on $689 million. Full-year revenue set a company record, the company said, citing the growth due in part to a 32 percent increase in brokerage commissions. It also beat analysts’ forecasts of $1.64 a share on $715 million revenue.
The earnings ended the first year, roughly, under the leadership of Chief Executive Hessam Nadji, who commented on the fourth-quarter earnings drop.
“The fourth quarter was particularly challenging, as the post-election jump in interest rates resulted in re-pricing of many pending transactions, especially smaller, private client deals, which typically have higher debt ratios,” Nadji said in a statement.
Marcus & Millichap shares closed Thursday down 39 cents, or 1.5 percent, to $26.29 on the New York Stock Exchange.