Back to top

Analyst Blog

Management services provider FTI Consulting, Inc. (FCN - Analyst Report) reported net income of $23.7 million or 58 cents per share in first quarter 2013 versus $18.4 million or 43 cents per share in the year-ago quarter. The healthy year-over-year increase in earnings is primarily attributable to a strong performance by the Economic Consulting group, accretive acquisitions, and stringent cost-cutting measures. The reported earnings exceeded the Zacks Consensus Estimate of 52 cents.

Excluding non-recurring items, adjusted earnings for the reported quarter were 59 cents per share compared to 43 cents in the year-earlier quarter.  
Total revenue in the reported quarter increased 3.0% year over year to a record first quarter high of $407.2 million. Adjusted EBITDA stood at $59.3 million compared to $54.0 million in the prior-year quarter.

Segment Details

Effective first quarter 2013, FTI Consulting restructured its reportable segments to better reflect changes in its business operations. The company combined healthcare practices from both its Corporate Finance/Restructuring and Forensic and Litigation Consulting segments under a single organizational structure within the Forensic and Litigation Consulting reportable segment.

Corporate Finance/Restructuring segment reported revenues of $99.1 million, up 2.3% year over year. The increase in revenues was buoyed by acquisition of an Australian restructuring business and higher demand for telecommunications, media and technology practice services.

Economic Consulting revenues improved 15.1% to $115.2 million in the quarter. The upside was aided by robust demand and higher average bill rates across the board, including financial economics, antitrust, European international arbitration, regulatory and valuation practices.

Forensic and Litigation Consulting segment revenue decreased 2.8% to $100.7 million due to lower demand for global financial and enterprise data analytics and core North American services.

Technology segment revenue was down 6.0% to $46.7 million, due to winding down of large investigation and litigation matters and lower pricing for consulting and services.

Strategic Communications segment revenues increased 1.0% year over year to $45.5 million in the quarter, driven by higher project income in North America and Europe, Middle East and Africa.

Liquidity

At quarter-end, FTI Consulting had cash and cash equivalents of $100.7 million with long-term debt of $717.0 million. In the reported quarter, the company repurchased 826,800 shares for $28.8 million. Additionally, the company completed a series of acquisitions aggregating $14.7 million.

Moving Forward

The company expects Economic Consulting segment to perform well in 2013 due to the potential merger and acquisition matters coupled with progress for industry initiatives, in Telecommunications, Media and Technology; Energy; Healthcare; Insurance; and Global Risk and Investigations. Additionally the company will continue its focus on organic growth and cash flow.

FTI Consulting currently has a Zacks Rank #3 (Hold). Other players in the industry worth reckoning include Huron Consulting Group Inc. (HURN - Snapshot Report), Stantec Inc. (STN - Snapshot Report), and Towers Watson & Co. (TW - Snapshot Report), each having a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%