We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is FTI Consulting (FCN) Down 2.7% Since Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for FTI Consulting (FCN - Free Report) . Shares have lost about 2.7% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is FTI Consulting due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
FTI Consulting delivered strong first-quarter 2019 results, with earnings and revenues beating the Zacks Consensus Estimate.
Adjusted earnings per share of $1.63 beat the Zacks Consensus Estimate by 63 cents and increased 56.7% on a year-over-year basis. The bottom line benefited from strong operating performance, lower interest expense and a lower effective tax rate.
Total revenues of $551.3 million beat the consensus mark by $48.6 million and increased 10.7% year over year. The increase was driven by higher demand across all business segments.
Revenues by Segment
Corporate Finance & Restructuring segment revenues increased 12.6% year over year to $161 million. The upside was driven by higher demand for business transformation and transactions, restructuring services, and higher success fees. The segment contributed 29% to total revenues.
Forensic and Litigation Consulting segment revenues increased 8.6% year over year to $139 million. The improvement came on the back of higher demand for investigations and construction solutions services, partially offset by lower demand for health solutions services. The segment contributed 25% to total revenues.
Strategic Communications segment revenues increased 9.3% year over year to $57.7 million. The uptick was driven by increase in project-based revenues in North America and EMEA, primarily associated with corporate reputation services, and a $2.0 million increase in pass-through revenues. The segment contributed 11% to total revenues.
Economic Consulting segment revenues increased 6.9% year over year to $142.3 million. The increase was driven by higher demand for antitrust services in Europe and EMEA, partially offset by lower demand for financial economics services in North America. The segment contributed 26% to total revenues.
Technology segment revenues increased 25.5% year over year to $51.3 million. The increase was driven by higher demand for cross-border investigations and merger and acquisition-related “second request” services in North America and Asia Pacific, partially offset by a decline in licensing revenues resulting from the Ringtail divestiture. The segment contributed 9% to total revenues.
Operating Results
Adjusted EBITDA came in at $96.1 million, up 32.9% on a year-over-year basis. The increase was due to higher revenues, partially offset by an increase in compensation and benefits expenses, primarily associated with a 7.7% increase in billable headcount compared with the prior-year quarter. Adjusted EBITDA margin increased to 17.4% from 14.5% in the prior-year quarter.
Segment wise, adjusted EBITDA margin for Corporate Finance & Restructuring declined to 23.2% from 24.4% in the year-ago quarter. Forensic and Litigation Consulting adjusted EBITDA margin increased to 22.9% from 20.1% in the prior-year quarter.
Adjusted EBITDA for Strategic Communications was 20% compared with 18.7% in the year-ago quarter. Economic Consulting adjusted EBITDA margin fell to 16.9% from 19.1% in the prior-year quarter. Adjusted EBITDA for Technology increased to 24.8% from 14% in the year-ago quarter.
Operating income came in at $87.2 million, up 40% from the prior-year quarter. Operating margin rose to 15.8% from 12.5% in the year-ago quarter.
Balance Sheet and Cash Flow
FTI Consulting exited the quarter with cash and cash equivalents of $179.2 million compared with $312.1 million in the prior quarter. Long-term debt was $268 million compared with $265.6 million at the end of the prior quarter.
The company used $102.1 million of net cash in operating activities and capex was $10.2 million in the quarter. It spent $21.9million to repurchase 327,978 shares in the quarter.
2019 Guidance
Management raised EPS and reiterated revenue guidance for the year. Adjusted EPS is now anticipated in the range of $3.38-$3.88 compared with the previous guidance of $3.33-$3.83. Management continues to expect revenues in the range of $2.00-$2.10 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -6.4% due to these changes.
VGM Scores
Currently, FTI Consulting has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, FTI Consulting has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is FTI Consulting (FCN) Down 2.7% Since Last Earnings Report?
It has been about a month since the last earnings report for FTI Consulting (FCN - Free Report) . Shares have lost about 2.7% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is FTI Consulting due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
FTI Consulting Tops Q1 Earnings, Revenues Estimates
FTI Consulting delivered strong first-quarter 2019 results, with earnings and revenues beating the Zacks Consensus Estimate.
Adjusted earnings per share of $1.63 beat the Zacks Consensus Estimate by 63 cents and increased 56.7% on a year-over-year basis. The bottom line benefited from strong operating performance, lower interest expense and a lower effective tax rate.
Total revenues of $551.3 million beat the consensus mark by $48.6 million and increased 10.7% year over year. The increase was driven by higher demand across all business segments.
Revenues by Segment
Corporate Finance & Restructuring segment revenues increased 12.6% year over year to $161 million. The upside was driven by higher demand for business transformation and transactions, restructuring services, and higher success fees. The segment contributed 29% to total revenues.
Forensic and Litigation Consulting segment revenues increased 8.6% year over year to $139 million. The improvement came on the back of higher demand for investigations and construction solutions services, partially offset by lower demand for health solutions services. The segment contributed 25% to total revenues.
Strategic Communications segment revenues increased 9.3% year over year to $57.7 million. The uptick was driven by increase in project-based revenues in North America and EMEA, primarily associated with corporate reputation services, and a $2.0 million increase in pass-through revenues. The segment contributed 11% to total revenues.
Economic Consulting segment revenues increased 6.9% year over year to $142.3 million. The increase was driven by higher demand for antitrust services in Europe and EMEA, partially offset by lower demand for financial economics services in North America. The segment contributed 26% to total revenues.
Technology segment revenues increased 25.5% year over year to $51.3 million. The increase was driven by higher demand for cross-border investigations and merger and acquisition-related “second request” services in North America and Asia Pacific, partially offset by a decline in licensing revenues resulting from the Ringtail divestiture. The segment contributed 9% to total revenues.
Operating Results
Adjusted EBITDA came in at $96.1 million, up 32.9% on a year-over-year basis. The increase was due to higher revenues, partially offset by an increase in compensation and benefits expenses, primarily associated with a 7.7% increase in billable headcount compared with the prior-year quarter. Adjusted EBITDA margin increased to 17.4% from 14.5% in the prior-year quarter.
Segment wise, adjusted EBITDA margin for Corporate Finance & Restructuring declined to 23.2% from 24.4% in the year-ago quarter. Forensic and Litigation Consulting adjusted EBITDA margin increased to 22.9% from 20.1% in the prior-year quarter.
Adjusted EBITDA for Strategic Communications was 20% compared with 18.7% in the year-ago quarter. Economic Consulting adjusted EBITDA margin fell to 16.9% from 19.1% in the prior-year quarter. Adjusted EBITDA for Technology increased to 24.8% from 14% in the year-ago quarter.
Operating income came in at $87.2 million, up 40% from the prior-year quarter. Operating margin rose to 15.8% from 12.5% in the year-ago quarter.
Balance Sheet and Cash Flow
FTI Consulting exited the quarter with cash and cash equivalents of $179.2 million compared with $312.1 million in the prior quarter. Long-term debt was $268 million compared with $265.6 million at the end of the prior quarter.
The company used $102.1 million of net cash in operating activities and capex was $10.2 million in the quarter. It spent $21.9million to repurchase 327,978 shares in the quarter.
2019 Guidance
Management raised EPS and reiterated revenue guidance for the year. Adjusted EPS is now anticipated in the range of $3.38-$3.88 compared with the previous guidance of $3.33-$3.83. Management continues to expect revenues in the range of $2.00-$2.10 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -6.4% due to these changes.
VGM Scores
Currently, FTI Consulting has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, FTI Consulting has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.