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.
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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.”