Marcus & Millichap (NYSE: MMI) reported Q3 EPS of $0.49, in-line with the analyst estimate of $0.49. Revenue for the quarter came in at $198.22 million versus the consensus estimate of $207.25 million.

Third Quarter 2019 Highlights Compared to Third Quarter 2018

• Total revenues decreased by 5.9% to $198.2 million
• Net income decreased by 7.5% to $19.3 million, or $0.49 per common share, diluted
• Revenue from financing fees increased by 0.4% to $16.0 million supported by refinancing activity
• Private Client brokerage revenue decreased by 3.7% compared to 8.6% growth in the third quarter of 2018
• Middle Market and Larger Transaction combined brokerage revenue decreased by 12.0%, with a difficult comparison to the combined 26.9% growth in the third quarter of 2018

Hessam Nadji, President and CEO stated, “Investor sentiment in the third quarter was weighted down by heightened recession concerns and trade tensions, notwithstanding still-strong real estate fundaments. The Fed’s reversal from raising interest rates a year ago to lowering rates this year also slowed momentum as many investors delayed transactions amid a changing environment and in anticipation of cheaper debt. Despite a persistent bid/ask spread and interim slowdown in sales, rents are rising, and occupancies are healthy in nearly all asset classes. Recent interest rate reductions, which appear to have bottomed, steady job growth and progress on the trade front should result in more transaction activity over the next few quarters. We are also encouraged by modest, steady growth in our pipeline, progress on the acquisition front and growth in our financing division.”

Mr. Nadji continued, “As we look ahead, MMI once again faces a challenging comparable given record growth in the fourth quarter of 2018. Our team remains focused on delivering best-in-class education and execution to our clients as they determine the appropriate timing for their individual transactions. We believe the Company is well positioned to further expand market share organically and through selective acquisitions. Our balance sheet remains a source of strength providing MMI the flexibility to continue to grow shareholder value over the long-term.”

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