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FTI Consulting (FCN) Q3 Earnings Top Estimates, '18 View Up
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FTI Consulting, Inc. (FCN - Free Report) reported strong third-quarter 2018 results wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Both the metrics also improved on a year-over-year basis.
Adjusted earnings per share of $1.00 beat the Zacks Consensus Estimate by 43 cents and increased 20.5% on year-over-year basis. The bottom line benefited from higher operating profits and a $6.2 million gain, net of taxes, related to the sale of the company’s Ringtail e-discovery software and related business.
Total revenues of $513 million beat the consensus mark by $41 million and increased 14.3% year over year. The top line benefited from strength across all business segments, with growth in the Economic Consulting and Technology segments as the primary catalysts.
So far this year, shares of FTI Consulting have gained 60.9%, significantly outperforming the 4.7% rise of the industry it belongs to.
Let’s check out the numbers in detail.
Revenues by Segment
Corporate Finance & Restructuring segment revenues increased 5.7% year over year to $135.4 million. The growth was driven by higher demand for business transformation and transactions services, which was partially offset by lower success fees. The segment accounted for 26% of total revenues.
Forensic and Litigation Consulting segment revenues increased 6.8% year over year to $126.7 million. Segment revenues grew on the back of higher demand for construction solutions, disputes and investigations services, which was partially offset by reduced demand for health solutions services. The segment contributed 25% to total revenues.
Strategic Communications segment revenues increased 14.3% year over year to $55.1 million. Higher project-based revenues and a $3.3 million increase in pass-through revenues boosted segmental revenues. The segment accounted for 11% of total revenues.
Economic Consulting segment revenues increased 24.5% year over year to $139.2 million. Segment revenues grew on the back of higher demand for antitrust and financial economics services. The segment contributed 27% to total revenues.
Technology segment revenues increased 34.1% year over year to $56.7 million. The increase was driven by higher demand for merger and acquisition-related “second request” services. The segment accounted for 11% of total revenues.
Adjusted EBITDA came in at $67.4 million, up 17.4% on a year-over-year basis. The increase was driven by higher revenues, which were partially offset by higher compensation and other selling, general and administrative expenses (SG&A) expenses. Adjusted EBITDA margin rose to 13.1% from 12.8% in the prior-year quarter.
Segment-wise, adjusted EBITDA margin for Corporate Finance & Restructuring declined to 19.8% from 20.9% in the year-ago quarter. Forensic and Litigation Consulting adjusted EBITDA margin decreased to 17.3% from 19% in the prior-year quarter. The same for Strategic Communications was 19.6% compared with 16.8% in the year-ago quarter. While Economic Consulting adjusted EBITDA margin increased to 16.7% from 10.8% in the prior-year quarter, the same for Technology rose to 20.2% from 14.1% in the year-ago quarter.
Operating income came in at $57.1 million, up 21.3% from the prior-year quarter. Operating margin rose to 11.1% from 10.5% in the year-ago quarter.
FTI Consulting, Inc. Price, Consensus and EPS Surprise
FTI Consulting exited third-quarter 2018 with cash and cash equivalents of $505.9 million compared with $116.6 million in the prior quarter. Long-term debt was $263.3 million compared with $371.7 million at the end of the prior quarter.
The company generated $120.9 million of net cash from operating activities compared with $106.2 million in the year-ago quarter. The year-over-year increase was driven by higher cash collections resulting from increased revenues, which was partially offset by an increase in cash paid for salaries and benefits.
Free cash flow was $109.2 million in the reported quarter. The company spent $16.6 million in capex in the reported quarter.
2018 Guidance
FTI Consulting raised its guidance for full-year 2018. The company now expects revenues in the range of $1.96-$1.99 billion compared with $1.91-$1.96 billion expected earlier. The Zacks Consensus Estimate of $1.95 billion is below the currently guided range.
Earnings per share are anticipated in the range of $3.60-$3.80 compared with $2.90-$3.30 expected earlier. The Zacks Consensus Estimate of $3.27 is below the currently guided range.
Investors interested in the broader Business Services sector are keenly awaiting third-quarter earnings reports of key players like Clean Harbors (CLH - Free Report) , Fiserv and WEX (WEX - Free Report) , all of which are scheduled to report on Oct 31.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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FTI Consulting (FCN) Q3 Earnings Top Estimates, '18 View Up
FTI Consulting, Inc. (FCN - Free Report) reported strong third-quarter 2018 results wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Both the metrics also improved on a year-over-year basis.
Adjusted earnings per share of $1.00 beat the Zacks Consensus Estimate by 43 cents and increased 20.5% on year-over-year basis. The bottom line benefited from higher operating profits and a $6.2 million gain, net of taxes, related to the sale of the company’s Ringtail e-discovery software and related business.
Total revenues of $513 million beat the consensus mark by $41 million and increased 14.3% year over year. The top line benefited from strength across all business segments, with growth in the Economic Consulting and Technology segments as the primary catalysts.
So far this year, shares of FTI Consulting have gained 60.9%, significantly outperforming the 4.7% rise of the industry it belongs to.
Let’s check out the numbers in detail.
Revenues by Segment
Corporate Finance & Restructuring segment revenues increased 5.7% year over year to $135.4 million. The growth was driven by higher demand for business transformation and transactions services, which was partially offset by lower success fees. The segment accounted for 26% of total revenues.
Forensic and Litigation Consulting segment revenues increased 6.8% year over year to $126.7 million. Segment revenues grew on the back of higher demand for construction solutions, disputes and investigations services, which was partially offset by reduced demand for health solutions services. The segment contributed 25% to total revenues.
Strategic Communications segment revenues increased 14.3% year over year to $55.1 million. Higher project-based revenues and a $3.3 million increase in pass-through revenues boosted segmental revenues. The segment accounted for 11% of total revenues.
Economic Consulting segment revenues increased 24.5% year over year to $139.2 million. Segment revenues grew on the back of higher demand for antitrust and financial economics services. The segment contributed 27% to total revenues.
Technology segment revenues increased 34.1% year over year to $56.7 million. The increase was driven by higher demand for merger and acquisition-related “second request” services. The segment accounted for 11% of total revenues.
FTI Consulting, Inc. Revenue (TTM)
FTI Consulting, Inc. Revenue (TTM) | FTI Consulting, Inc. Quote
Operating Results
Adjusted EBITDA came in at $67.4 million, up 17.4% on a year-over-year basis. The increase was driven by higher revenues, which were partially offset by higher compensation and other selling, general and administrative expenses (SG&A) expenses. Adjusted EBITDA margin rose to 13.1% from 12.8% in the prior-year quarter.
Segment-wise, adjusted EBITDA margin for Corporate Finance & Restructuring declined to 19.8% from 20.9% in the year-ago quarter. Forensic and Litigation Consulting adjusted EBITDA margin decreased to 17.3% from 19% in the prior-year quarter. The same for Strategic Communications was 19.6% compared with 16.8% in the year-ago quarter. While Economic Consulting adjusted EBITDA margin increased to 16.7% from 10.8% in the prior-year quarter, the same for Technology rose to 20.2% from 14.1% in the year-ago quarter.
Operating income came in at $57.1 million, up 21.3% from the prior-year quarter. Operating margin rose to 11.1% from 10.5% in the year-ago quarter.
FTI Consulting, Inc. Price, Consensus and EPS Surprise
FTI Consulting, Inc. Price, Consensus and EPS Surprise | FTI Consulting, Inc. Quote
Balance Sheet and Cash Flow
FTI Consulting exited third-quarter 2018 with cash and cash equivalents of $505.9 million compared with $116.6 million in the prior quarter. Long-term debt was $263.3 million compared with $371.7 million at the end of the prior quarter.
The company generated $120.9 million of net cash from operating activities compared with $106.2 million in the year-ago quarter. The year-over-year increase was driven by higher cash collections resulting from increased revenues, which was partially offset by an increase in cash paid for salaries and benefits.
Free cash flow was $109.2 million in the reported quarter. The company spent $16.6 million in capex in the reported quarter.
2018 Guidance
FTI Consulting raised its guidance for full-year 2018. The company now expects revenues in the range of $1.96-$1.99 billion compared with $1.91-$1.96 billion expected earlier. The Zacks Consensus Estimate of $1.95 billion is below the currently guided range.
Earnings per share are anticipated in the range of $3.60-$3.80 compared with $2.90-$3.30 expected earlier. The Zacks Consensus Estimate of $3.27 is below the currently guided range.
Zacks Rank & Upcoming Releases
Currently, FTI Consulting sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Investors interested in the broader Business Services sector are keenly awaiting third-quarter earnings reports of key players like Clean Harbors (CLH - Free Report) , Fiserv and WEX (WEX - Free Report) , all of which are scheduled to report on Oct 31.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>