FIRSTSERVICE CORP. $33.92 - Toronto symbol FSV

FIRSTSERVICE CORP. $33.92 (Toronto symbol FSV; TSINetwork Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 28.8 million; Market cap: $976.9 million; No dividends paid) serves the following areas of the real estate market: commercial real estate, residential property management and property improvement. FirstService has more than 23,000 employees worldwide.

In the three months ended December 31, 2012, the company’s revenue rose 6.3%, to $632.5 million from $594.9 million a year earlier (all figures except share prices in U.S. dollars). Excluding one-time items, earnings per share jumped 30.8%, to $0.68 from $0.52.

Revenue rose at two of FirstService’s three divisions: commercial real estate (up 23%) and residential property management (up 10%).

Property services revenue fell 48%. That’s because increased U.S. government regulations continue to slow the rate at which banks and other mortgage providers can foreclose on homeowners who are behind on their payments. As a result, there were fewer newly foreclosed houses for the property services division to manage in the latest quarter.

The company’s $375.2 million of debt is a somewhat high 38.4% of its $976.9-million market cap.

FirstService needs a continued recovery in global real estate markets for its shares to keep rising. Meanwhile, the stock trades at 19.1 times the $1.78 a share that the company will likely earn this year.

FirstService is a hold.

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