Marcus & Millichap (MMI) has reported a 13.91 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $17.17 million, or $0.44 a share in the quarter, compared with $19.95 million, or $0.51 a share for the same period last year.
Revenue during the quarter dropped 6.89 percent to $189.16 million from $203.16 million in the previous year period.
Cost of revenue dropped 6.19 percent or $8.03 million during the quarter to $121.64 million. Gross margin for the quarter contracted 48 basis points over the previous year period to 35.70 percent.
Total expenses were $161.25 million for the quarter, down 4.71 percent or $7.97 million from year-ago period. Operating margin for the quarter contracted 195 basis points over the previous year period to 14.75 percent.
Operating income for the quarter was $27.91 million, compared with $33.93 million in the previous year period. However, the adjusted EBITDA for the quarter stood at $31.28 million compared with $35.25 million in the prior year period. At the same time, adjusted EBITDA margin contracted 82 basis points in the quarter to 16.54 percent from 17.35 percent in the last year period.
"2016 was a year of transition in the marketplace. Our team's experience and steadfast focus on client results enabled us to help investors navigate a changing environment while gaining market share," said Hessam Nadji, president and chief executive officer. "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. We also saw a wait-and-see stance anticipating the Trump administration's tax reform, regulatory easing and economic initiatives. Beyond these headwinds, healthy property fundamentals and favorable investor demographics, coupled with the administration’s proposals, bode well for the real estate market and generating more activity once policy clarity emerges,"
Net receivables were at $5.99 million as on Dec. 31, 2016, down 18.94 percent or $1.40 million from year-ago.
Investments stood at $104.93 million as on Dec. 31, 2016, down 21.84 percent or $29.33 million from year-ago.
Total assets grew 22.66 percent or $72.79 million to $394.02 million on Dec. 31, 2016. On the other hand, total liabilities were at $135.16 million as on Dec. 31, 2016, up 2.21 percent or $2.93 million from year-ago.
Return on assets moved down 187 basis points to 4.45 percent in the quarter. At the same time, return on equity moved down 392 basis points to 6.63 percent in the quarter.
Debt comes down
Total debt was at $9.67 million as on Dec. 31, 2016, down 8.84 percent or $0.94 million from year-ago. Shareholders equity stood at $258.85 million as on Dec. 31, 2016, up 36.97 percent or $69.86 million from year-ago. As a result, debt to equity ratio went down 2 basis points to 0.04 percent in the quarter.
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