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FTI Consulting's Q3 Earnings Beat Estimates

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FTI Consulting, Inc (FCN - Free Report) reported adjusted net income of $29.2 million or 72 cents per share in the third quarter of 2013, up from $24.5 million or 60 cents a share in the prior-year quarter. The adjusted earnings comfortably beat the Zacks Consensus Estimate of 48 cents.

The company reported GAAP net loss of $50.6 million or loss of $1.29 per share in third quarter 2013 versus net income of $22.7 million or 55 cents per share in the year-ago quarter. The decrease in GAAP earnings was driven by non-cash goodwill charges related to strategic communications segment and other non recurring charges.

Total revenue in the reported quarter increased 7.4% year over year to $414.6 million. The revenues beat the Zacks Consensus Estimate of $402 million. Adjusted EBITDA stood at $72.5 million compared with $62.3 million in the prior-year quarter.

Segment Details

Corporate Finance/Restructuring segment reported revenues of $94.0 million in third quarter 2013 versus $93.1 million in the year-ago quarter. The marginal increase in revenues was buoyed by acquisitions, partially offset by decline in bankruptcy and restructuring revenues in the North America regions.

Economic Consulting revenues improved 17.3% year on year to $113.1 million in the reported quarter. The upside was aided by strong demand for the segment's antitrust litigation services in North America and Europe, Middle East and Africa (EMEA), and international arbitration, regulatory and valuation practices in EMEA.

Forensic and Litigation Consulting segment revenues increased 12.5% year over year to $113.1 million, primarily driven by a success fee in the North America investigations practice and increased demand in the health solutions practice.

Technology segment revenues were up 1.8% to $51.2 million. The increase in revenues was driven by higher services revenues primarily for investigations.

Strategic Communications segment revenues decreased 5.4% year over year to $43.3 million in the quarter, driven by  reduced pass-through revenues for certain EMEA and North America retained engagements and weak mergers and acquisitions activity in the Asia Pacific region.


At quarter-end, FTI Consulting had cash and cash equivalents of $147.9 million with long-term debt of $711.0 million. Net cash provided by operating activities in the quarter was $84.4 million compared with $70.9 million in the prior-year quarter. During the quarter, the company used approximately $20.0 million to repurchase and retire 595,225 shares of the company.

Moving Forward

Based on current market conditions, the company reiterated earlier guidance of revenue and adjusted EPS in the range of $1.62 billion to $1.65 billion and $2.10 to $2.20 respectively.
FTI Consulting has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth considering now in the industry include CoreLogic, Inc (CLGX - Free Report) , carrying a Zacks Rank #1 (Strong Buy), and CBIZ, Inc. (CBZ - Free Report) and Corporate Executive Board Co , both carrying a Zacks Rank #2 (Buy).

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