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FTI Consulting Inc. (FCN - Analyst Report), a Florida-based business advisory firm, recently announced preliminary revenue and earnings estimates for the second quarter of 2011. Revenues are expected to be in the range of $395 million to $401 million and adjusted earnings per diluted share in the range of 54–59 cents.

The adjusted earnings for the second quarter exclude a special charge estimated at $17 million on a pre-tax basis. The special charge could affect earnings per diluted share by 24 cents. Hence, on a GAAP basis, the estimated earnings per diluted share are 30–35 cents. The Zacks Consensus Estimate for the second quarter is 57 cents per share, representing an annualized growth of 8.92%.

The company incurred the special charge on initiatives taken during the quarter to bring executive management related overhead cost in sync with the recent restructuring of the company. However, FTI Consulting expects these actions to result in savings of approximately $9 million over the remainder of the year.

For fiscal 2011, FTI Consulting expects total revenue to range between $1.50 billion and $1.54 billion (previously, the range was $1.43–$1.49 billion). Diluted earnings per share are expected to remain within $2.30 to $2.45 (previously, the range was $2.00–$2.20). The Zacks Consensus Estimate for fiscal 2011 is $2.35, representing an annualized growth of 2.58%.

Last month, one of FTI Consulting’s competitors, Lender Processing Services Inc. , lowered its second quarter 2011 adjusted earnings outlook to 54 cents to 56 cents from 79 cents to 82 cents due to a further drop in default volume and origination activity, particularly for refinancing. Additionally, higher regulatory and legal expenses forced the company to lower its outlook. The company also expects second quarter revenue to fall 8% sequentially.

FTI Consulting has acquired more than 25 companies over the past five years. In January, the company announced plans to bring all its acquired firms under one brand, i.e. FTI Consulting, while retaining their key professionals and brand equity, by November 2011. FTI Consulting believes that the one-brand strategy will enhance brand recognition, particularly in the new markets.

However, despite improving corporate earnings and a strong liquidity, clients’ spending remains cautious given concerns over the extent and sustainability of economic recovery. FTI Consulting is slated to release its second-quarter 2011 results on August 4. We have a Zacks #3 Rank (short-term Hold rating) on the stock. We also reiterate our long-term Neutral recommendation.

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