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FTI Consulting (FCN) Misses on Q4 Earnings, Stock Falls
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Management services provider FTI Consulting, Inc. (FCN - Free Report) reported tepid fourth-quarter 2016 results with adjusted earnings of $9.9 million or 24 cents per share compared with $10.2 million or 24 cents per share in the year-earlier quarter on relatively flatter revenues. The adjusted earnings missed the Zacks Consensus Estimate by 5 cents. Shares fell 1.13% during the entire trading session to close at $40.24 yesterday, as investors probably expected a healthy earnings beat.
GAAP net income for the reported quarter was $7.1 million or 17 cents per share compared with $10.3 million or 25 cents per share in the year-ago quarter. The year-over-year decrease in GAAP earnings was primarily due to higher operating expenses in the reported quarter.
For full-year 2016, GAAP earnings improved to $85.5 million or $2.05 per share from $66.1 million or $1.58 per share in 2015, primarily driven by higher revenues. Adjusted earnings for 2016 were $93.2 million or $2.24 per share compared with $76.8 million or $1.84 per share in 2015.
Revenues for the quarter were $441.9 million compared with $442.2 million in the year-earlier quarter. Revenues beat the Zacks Consensus Estimate of $433 million. Excluding the estimated negative impact of foreign currency translation, revenues improved 2.6% year over year. For 2016, revenues increased to $1,810.4 million from $1,779.1 million in 2015.
Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) for the quarter were $30.3 million, down from $35.2 million in the prior-year quarter, owing to higher compensation-related expenses in the Corporate Finance & Restructuring segment and lower demand in the Forensic and Litigation Consulting segment.
Segmental Details
Corporate Finance & Restructuring revenues were $113.4 million, up 1.6% year over year due to higher realized pricing for restructuring services and higher success fees. Adjusted EBITDA for the segment was $16.3 million, down from $18.9 million in the year-ago quarter, driven primarily by higher compensation costs.
Economic Consulting revenues increased to $129.3 million from $118.6 million in the prior-year quarter, largely driven by higher demand of merger and acquisition related antitrust services. Adjusted EBITDA came in at $19.0 million versus $18.8 million in the prior-year quarter.
Forensic and Litigation Consulting revenues fell to $105.5 million in the quarter from $116.7 million in the year-earlier quarter, driven by lower demand for advisory and health solutions. Adjusted EBITDA for the segment decreased to $6.3 million from $8.8 million on lower revenues.
Technology revenues declined to $43.5 million from $46.6 million in the prior-year quarter. The decline in revenues was attributable to lower M&A-related activities and lower demand for litigation services. Adjusted EBITDA came in at $5.6 million compared with $6.0 million in the prior-year quarter driven by lower revenues.
Strategic Communications revenues increased to $50.3 million from $48.8 million in the prior-year quarter, owing to higher project-based revenues in the Europe, Middle East and Africa (EMEA) region. Adjusted EBITDA for the segment was $8.4 million compared with $7.6 million in the prior-year quarter, largely due to higher revenues.
FTI Consulting, Inc. Price, Consensus and EPS Surprise
FTI Consulting had cash and cash equivalents of $216.2 million at Dec 31, 2016, compared with $149.8 million in the year-ago period. Total debt was $365.5 million at year-end 2016, down from $494.8 million at Dec 31, 2015. Net cash provided by operating activities in 2016 was $233.5 million compared with $139.9 million in the year-ago period.
The company repurchased 537,400 shares in 2016 at an average price of $39.97 per share for $21.5 million. At the year end, FTI Consulting had approximately $81.4 million worth of shares available under its $100.0 million share repurchase authorization.
Guidance
For 2017, the company expects revenues to be approximately $1.80–$1.90 billion. GAAP earnings are expected to be within $1.95–$2.30 per share, while adjusted earnings per share are likely to be in the range of $2.10–$2.40.
CBIZ has beaten earnings estimates twice in the trailing four quarters for a positive surprise of 21.45%.
CRA International has a long-term earnings growth expectation of 8%.
The Hackett Group has a long-term earnings growth expectation of 17.3%.
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FTI Consulting (FCN) Misses on Q4 Earnings, Stock Falls
Management services provider FTI Consulting, Inc. (FCN - Free Report) reported tepid fourth-quarter 2016 results with adjusted earnings of $9.9 million or 24 cents per share compared with $10.2 million or 24 cents per share in the year-earlier quarter on relatively flatter revenues. The adjusted earnings missed the Zacks Consensus Estimate by 5 cents. Shares fell 1.13% during the entire trading session to close at $40.24 yesterday, as investors probably expected a healthy earnings beat.
GAAP net income for the reported quarter was $7.1 million or 17 cents per share compared with $10.3 million or 25 cents per share in the year-ago quarter. The year-over-year decrease in GAAP earnings was primarily due to higher operating expenses in the reported quarter.
For full-year 2016, GAAP earnings improved to $85.5 million or $2.05 per share from $66.1 million or $1.58 per share in 2015, primarily driven by higher revenues. Adjusted earnings for 2016 were $93.2 million or $2.24 per share compared with $76.8 million or $1.84 per share in 2015.
Revenues for the quarter were $441.9 million compared with $442.2 million in the year-earlier quarter. Revenues beat the Zacks Consensus Estimate of $433 million. Excluding the estimated negative impact of foreign currency translation, revenues improved 2.6% year over year. For 2016, revenues increased to $1,810.4 million from $1,779.1 million in 2015.
Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) for the quarter were $30.3 million, down from $35.2 million in the prior-year quarter, owing to higher compensation-related expenses in the Corporate Finance & Restructuring segment and lower demand in the Forensic and Litigation Consulting segment.
Segmental Details
Corporate Finance & Restructuring revenues were $113.4 million, up 1.6% year over year due to higher realized pricing for restructuring services and higher success fees. Adjusted EBITDA for the segment was $16.3 million, down from $18.9 million in the year-ago quarter, driven primarily by higher compensation costs.
Economic Consulting revenues increased to $129.3 million from $118.6 million in the prior-year quarter, largely driven by higher demand of merger and acquisition related antitrust services. Adjusted EBITDA came in at $19.0 million versus $18.8 million in the prior-year quarter.
Forensic and Litigation Consulting revenues fell to $105.5 million in the quarter from $116.7 million in the year-earlier quarter, driven by lower demand for advisory and health solutions. Adjusted EBITDA for the segment decreased to $6.3 million from $8.8 million on lower revenues.
Technology revenues declined to $43.5 million from $46.6 million in the prior-year quarter. The decline in revenues was attributable to lower M&A-related activities and lower demand for litigation services. Adjusted EBITDA came in at $5.6 million compared with $6.0 million in the prior-year quarter driven by lower revenues.
Strategic Communications revenues increased to $50.3 million from $48.8 million in the prior-year quarter, owing to higher project-based revenues in the Europe, Middle East and Africa (EMEA) region. Adjusted EBITDA for the segment was $8.4 million compared with $7.6 million in the prior-year quarter, largely due to higher revenues.
FTI Consulting, Inc. Price, Consensus and EPS Surprise
FTI Consulting, Inc. Price, Consensus and EPS Surprise | FTI Consulting, Inc. Quote
Balance Sheet & Cash Flow
FTI Consulting had cash and cash equivalents of $216.2 million at Dec 31, 2016, compared with $149.8 million in the year-ago period. Total debt was $365.5 million at year-end 2016, down from $494.8 million at Dec 31, 2015. Net cash provided by operating activities in 2016 was $233.5 million compared with $139.9 million in the year-ago period.
The company repurchased 537,400 shares in 2016 at an average price of $39.97 per share for $21.5 million. At the year end, FTI Consulting had approximately $81.4 million worth of shares available under its $100.0 million share repurchase authorization.
Guidance
For 2017, the company expects revenues to be approximately $1.80–$1.90 billion. GAAP earnings are expected to be within $1.95–$2.30 per share, while adjusted earnings per share are likely to be in the range of $2.10–$2.40.
FTI Consulting currently has a Zacks Rank #4 (Sell). Some better-ranked stocks in the industry include CBIZ, Inc. (CBZ - Free Report) , CRA International, Inc. (CRAI - Free Report) and The Hackett Group, Inc. (HCKT - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CBIZ has beaten earnings estimates twice in the trailing four quarters for a positive surprise of 21.45%.
CRA International has a long-term earnings growth expectation of 8%.
The Hackett Group has a long-term earnings growth expectation of 17.3%.
Everything You Need to Know About Snapchat BEFORE It Goes Public
You may be curious about the buzz surrounding Snap Inc.'s IPO on March 2. With the company expected to be valued around $22 billion, it is expected to be the largest IPO since 2014. But should you snap up this tech stock on Day 1?
In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges. You'll also learn about 4 other exciting tech companies with jaw-dropping growth. Each could go public in the coming months.
Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop. Download this IPO Watch List today for free >>