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FTI Consulting (FCN) Beats Q3 Earnings and Revenue Estimates
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FTI Consulting (FCN - Free Report) delivered solid third-quarter 2019 results, with both earnings and revenues beating the Zacks Consensus Estimate.
Adjusted earnings per share of $1.63 beat the Zacks Consensus Estimate by 60 cents and increased 63% on a year-over-year basis. The bottom line benefited from strong operating performance by the company’s Corporate Finance & Restructuring, and Forensic and Litigation Consulting segments.
Total revenues of $593.1 million beat the consensus mark by $53 million and increased 15.6% year over year. The increase was driven by higher demand across all business segments.
Shares of the company have gained a massive 61.5% year to date, significantly outperforming the 25.7% rally of the industry it belongs to.
Let’s check the numbers in detail.
Revenues by Segment
Corporate Finance & Restructuring segment revenues increased 41.6% year over year to $191.7 million. The upside was driven by higher demand for restructuring and business transformation and transactions services. The segment contributed 32% to total revenues.
Forensic and Litigation Consulting segment revenues increased 12.6% year over year to $142.7 million. The improvement came on the back of higher demand for disputes and investigations services. The segment contributed 24% to total revenues.
Strategic Communications segment revenues increased 8.9% year over year to $60 million. The upside was driven by increase in project-based revenues in North America and EMEA, primarily associated with corporate reputation services. The segment contributed 10% to total revenues.
Economic Consulting segment revenues increased 1.8% year over year to $141.7 million. The increase was supported by higher demand for non-merger and acquisition-related antitrust services. The segment contributed 24% to total revenues.
Technology segment revenues rose 0.7% year over year to $57.1 million. The increase was driven by higher demand for global cross-border investigations and litigation services, offset by lower demand for merger and acquisition-related “second request” services. The segment contributed 10% to total revenues.
Operating Results
Adjusted EBITDA came in at $92.3 million, up 37% on a year-over-year basis. The increase was driven by higher revenues in Corporate Finance & Restructuring, and Forensic and Litigation Consulting segments, partially offset by an increase in compensation expenses and selling, general and administrative (SG&A) expenses.
Balance Sheet and Cash Flow
FTI Consulting exited the quarter with cash and cash equivalents of $258.5 million compared with $189.1 million in the prior quarter. Long-term debt was $273.1 million compared with $290.5 million at the end of the prior quarter.
The company generated $131.3 million of net cash from operating activities and capex was $6.4 million in the quarter. It spent $7.7 million to repurchase 90,848 shares in the quarter.
2019 Guidance
Management raised adjusted EPS and revenue guidance for the year. Adjusted EPS is now anticipated in the range of $5.75 to $6.00 compared with the previous guidance of $5-$5.50. The mid-point ($5.88) of the revised guided range is higher than the Zacks Consensus Estimate of $5.42.
Management now expects revenues in the range of $2.250 billion to $2.300 billion, compared with the previous guidance of $2.175-$2.250 billion.
Zacks Rank & Other Stocks to Consider
Currently, FTI Consulting carries a Zacks Rank #1 (Strong Buy).
Long-term earnings (three to five years) growth rate for FleetCor, S&P Global and Paychex is estimated at 15.6%, 10% and 7%, respectively.
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FTI Consulting (FCN) Beats Q3 Earnings and Revenue Estimates
FTI Consulting (FCN - Free Report) delivered solid third-quarter 2019 results, with both earnings and revenues beating the Zacks Consensus Estimate.
Adjusted earnings per share of $1.63 beat the Zacks Consensus Estimate by 60 cents and increased 63% on a year-over-year basis. The bottom line benefited from strong operating performance by the company’s Corporate Finance & Restructuring, and Forensic and Litigation Consulting segments.
Total revenues of $593.1 million beat the consensus mark by $53 million and increased 15.6% year over year. The increase was driven by higher demand across all business segments.
Shares of the company have gained a massive 61.5% year to date, significantly outperforming the 25.7% rally of the industry it belongs to.
Let’s check the numbers in detail.
Revenues by Segment
Corporate Finance & Restructuring segment revenues increased 41.6% year over year to $191.7 million. The upside was driven by higher demand for restructuring and business transformation and transactions services. The segment contributed 32% to total revenues.
Forensic and Litigation Consulting segment revenues increased 12.6% year over year to $142.7 million. The improvement came on the back of higher demand for disputes and investigations services. The segment contributed 24% to total revenues.
Strategic Communications segment revenues increased 8.9% year over year to $60 million. The upside was driven by increase in project-based revenues in North America and EMEA, primarily associated with corporate reputation services. The segment contributed 10% to total revenues.
Economic Consulting segment revenues increased 1.8% year over year to $141.7 million. The increase was supported by higher demand for non-merger and acquisition-related antitrust services. The segment contributed 24% to total revenues.
Technology segment revenues rose 0.7% year over year to $57.1 million. The increase was driven by higher demand for global cross-border investigations and litigation services, offset by lower demand for merger and acquisition-related “second request” services. The segment contributed 10% to total revenues.
Operating Results
Adjusted EBITDA came in at $92.3 million, up 37% on a year-over-year basis. The increase was driven by higher revenues in Corporate Finance & Restructuring, and Forensic and Litigation Consulting segments, partially offset by an increase in compensation expenses and selling, general and administrative (SG&A) expenses.
Balance Sheet and Cash Flow
FTI Consulting exited the quarter with cash and cash equivalents of $258.5 million compared with $189.1 million in the prior quarter. Long-term debt was $273.1 million compared with $290.5 million at the end of the prior quarter.
The company generated $131.3 million of net cash from operating activities and capex was $6.4 million in the quarter. It spent $7.7 million to repurchase 90,848 shares in the quarter.
2019 Guidance
Management raised adjusted EPS and revenue guidance for the year. Adjusted EPS is now anticipated in the range of $5.75 to $6.00 compared with the previous guidance of $5-$5.50. The mid-point ($5.88) of the revised guided range is higher than the Zacks Consensus Estimate of $5.42.
Management now expects revenues in the range of $2.250 billion to $2.300 billion, compared with the previous guidance of $2.175-$2.250 billion.
Zacks Rank & Other Stocks to Consider
Currently, FTI Consulting carries a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the broader Zacks Business Services sector are FleetCor , S&P Global (SPGI - Free Report) and Paychex (PAYX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings (three to five years) growth rate for FleetCor, S&P Global and Paychex is estimated at 15.6%, 10% and 7%, respectively.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
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