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FTI Consulting, Inc. (FCN - Free Report) delivered impressive first-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate.
However, the better-than-expected results failed to impress the market as there has not been any major price change since the earnings release on Apr 29. Notably, FTI Consulting’s shares have increased 17.3% in the past year compared with 62% surge of the industry it belongs to.
Adjusted earnings per share of $1.89 (excluding 5 cents from non-recurring item) surpassed the Zacks Consensus Estimate by 60.2% and increased 23.5% on a year-over-year basis. The bottom line was positively impacted by higher operating income.
Total revenues of $686.3 million beat the consensus mark by 11.3% and increased 13.5% on a year-over-year basis. This uptick was driven by higher segmental revenue growth.
Revenues by Segment
Corporate Finance & Restructuring’s revenues increased 8.9% year over year to $226.2 million. The upside was driven by favourable foreign exchange rates, acquisition-related revenues, solid demand and realized rates for transactions services. The segment contributed 33% to total revenues.
Forensic and Litigation Consulting’s revenues increased 2.2% year over year to $150.8 million. The surge in revenues was primarily due to the positive impact of exchange rates, higher demand for health solutions and investigations services. The segment contributed 22% to total revenues.
Strategic Communications’ revenues increased 3.7% year over year to $60.5 million. The uptick was due to higher demand for public affairs services. The segment contributed 8.8% to total revenues.
Technology’s revenues increased 35.3% year over year to $79.5 million. The upside resulted from higher demand for mergers and acquisitions (M&A)-related second request. The segment contributed 11.6% to total revenues.
Economic Consulting’s revenues were up 28.1% year over year to $169.3 million. The upside can be attributed to higher demand for non-merger and acquisition M&A-related antitrust services, M&A-related antitrust services, higher realized rates and demand for international arbitration services. The segment contributed 24.6% to total revenues.
FTI Consulting, Inc. Price, Consensus and EPS Surprise
Adjusted EBITDA was $99.5 million, up 19.6% on a year-over-year basis. Increase in Adjusted EBITDA was primarily due to higher revenues. Adjusted EBITDA margin expanded 70 basis points year over year to 14.5%.
Operating income was $88.5 million, up 21.1% on a year-over-year basis. Operating margin expanded 80 basis points to 12.9% on a year-over-year basis.
Balance Sheet and Cash Flow
FTI Consulting exited the quarter with cash and cash equivalents of $233.4 million compared with the prior-quarter’s level of $295 million.
Long-term debt was $458.8 million compared with $286.1 million witnessed at the end of the previous quarter.
The company used $166.6 million of net cash from operating activities and CapEx was $7.97 million. It spent $46.1 million to repurchase 421,725 shares during this quarter.
2021 Guidance
The company rehearsed its full-year 2021 guidance.
The company expects 2021 revenues to be between $2.575 billion and $2.7 billion. The midpoint ($2.63 billion) of the guidance is higher than the current Zacks Consensus Estimate of $2.62 billion.
Adjusted EPS is expected between $5.80 and $6.50, the midpoint ($6.15) of which is lower than the current Zacks Consensus Estimate of $6.17.
FTI Consulting currently carries a Zacks Rank #3 (Hold).
Equifax’s (EFX - Free Report) first-quarter 2021 adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and increased on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus mark by 7.9% and rose 26.6% year over year on a reported basis as well as on a local-currency basis.
Robert Half’s (RHI - Free Report) first-quarter 2021 earnings of 98 cents per share beat the consensus mark by 22.5% and were up 24.1% year over year. Revenues of $1.4 billion surpassed the consensus mark by 3.3% but declined 7.2% year over year on a reported basis and 7.6% on an adjusted basis.
Omnicom’s (OMC - Free Report) first-quarter 2021 adjusted earnings of $1.33 per share beat the consensus mark by 16.7% and increased 11.8% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3.6% and increased marginally year over year.
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FTI Consulting's (FCN) Q1 Earnings Beat Estimates, Rises Y/Y
FTI Consulting, Inc. (FCN - Free Report) delivered impressive first-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate.
However, the better-than-expected results failed to impress the market as there has not been any major price change since the earnings release on Apr 29. Notably, FTI Consulting’s shares have increased 17.3% in the past year compared with 62% surge of the industry it belongs to.
Adjusted earnings per share of $1.89 (excluding 5 cents from non-recurring item) surpassed the Zacks Consensus Estimate by 60.2% and increased 23.5% on a year-over-year basis. The bottom line was positively impacted by higher operating income.
Total revenues of $686.3 million beat the consensus mark by 11.3% and increased 13.5% on a year-over-year basis. This uptick was driven by higher segmental revenue growth.
Revenues by Segment
Corporate Finance & Restructuring’s revenues increased 8.9% year over year to $226.2 million. The upside was driven by favourable foreign exchange rates, acquisition-related revenues, solid demand and realized rates for transactions services. The segment contributed 33% to total revenues.
Forensic and Litigation Consulting’s revenues increased 2.2% year over year to $150.8 million. The surge in revenues was primarily due to the positive impact of exchange rates, higher demand for health solutions and investigations services. The segment contributed 22% to total revenues.
Strategic Communications’ revenues increased 3.7% year over year to $60.5 million. The uptick was due to higher demand for public affairs services. The segment contributed 8.8% to total revenues.
Technology’s revenues increased 35.3% year over year to $79.5 million. The upside resulted from higher demand for mergers and acquisitions (M&A)-related second request. The segment contributed 11.6% to total revenues.
Economic Consulting’s revenues were up 28.1% year over year to $169.3 million. The upside can be attributed to higher demand for non-merger and acquisition M&A-related antitrust services, M&A-related antitrust services, higher realized rates and demand for international arbitration services. The segment contributed 24.6% to total revenues.
FTI Consulting, Inc. Price, Consensus and EPS Surprise
FTI Consulting, Inc. price-consensus-eps-surprise-chart | FTI Consulting, Inc. Quote
Operating Results
Adjusted EBITDA was $99.5 million, up 19.6% on a year-over-year basis. Increase in Adjusted EBITDA was primarily due to higher revenues. Adjusted EBITDA margin expanded 70 basis points year over year to 14.5%.
Operating income was $88.5 million, up 21.1% on a year-over-year basis. Operating margin expanded 80 basis points to 12.9% on a year-over-year basis.
Balance Sheet and Cash Flow
FTI Consulting exited the quarter with cash and cash equivalents of $233.4 million compared with the prior-quarter’s level of $295 million.
Long-term debt was $458.8 million compared with $286.1 million witnessed at the end of the previous quarter.
The company used $166.6 million of net cash from operating activities and CapEx was $7.97 million. It spent $46.1 million to repurchase 421,725 shares during this quarter.
2021 Guidance
The company rehearsed its full-year 2021 guidance.
The company expects 2021 revenues to be between $2.575 billion and $2.7 billion. The midpoint ($2.63 billion) of the guidance is higher than the current Zacks Consensus Estimate of $2.62 billion.
Adjusted EPS is expected between $5.80 and $6.50, the midpoint ($6.15) of which is lower than the current Zacks Consensus Estimate of $6.17.
FTI Consulting currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Equifax’s (EFX - Free Report) first-quarter 2021 adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and increased on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus mark by 7.9% and rose 26.6% year over year on a reported basis as well as on a local-currency basis.
Robert Half’s (RHI - Free Report) first-quarter 2021 earnings of 98 cents per share beat the consensus mark by 22.5% and were up 24.1% year over year. Revenues of $1.4 billion surpassed the consensus mark by 3.3% but declined 7.2% year over year on a reported basis and 7.6% on an adjusted basis.
Omnicom’s (OMC - Free Report) first-quarter 2021 adjusted earnings of $1.33 per share beat the consensus mark by 16.7% and increased 11.8% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3.6% and increased marginally year over year.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
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