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FTI Consulting (FCN) Falls 2.5% Following Q1 Earnings Miss
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Shares of FTI Consulting, Inc. (FCN - Free Report) declined 2.5% since the first-quarter 2023 earnings release in response to earnings missing estimates.
Adjusted earnings per share of $1.34 missed the Zacks Consensus Estimate by 19.8% and our estimate by 19.3%, decreasing 19.3% on a year-over-year basis.
Total revenues of $806.7 million surpassed the consensus mark by 2.4% and our estimate by 3%, rising 11.5% on a year-over-year basis.
The stock has gained 6.8% in the past year against the 1.9% decline of the industry it belongs to.
Quarterly Numbers in Detail
Forensic and Litigation Consulting revenues increased 12.7% year over year to $173.4 million. The uptick was primarily driven by higher demand for investigations, data & analytics, and health solutions services.
Strategic Communications revenues increased 4.5% year over year to $73.1 million. The upside can be attributed to higher demand for corporate reputation services.
Technology revenues increased 12.6% year over year to $90.6 million. The improvement was primarily driven by higher demand for investigations and litigation services, partially offset by lower demand for information governance, and privacy & security services.
Economic Consulting revenues increased 2.2% year over year to $169.6 million. The increase can be attributed to higher demand for merger and acquisition (“M&A”)-related antitrust services and higher realization for non-M&A-related antitrust services, partially offset by lower demand for non-M&A-related antitrust services.
Corporate Finance & Restructuring revenues increased 18.4% year over year to $300 million. The uptick was primarily on higher demand for restructuring and business transformation services, partially offset by a decrease in demand for transaction services.
Operating Results
Adjusted EBITDA was $78.4 million, down 13.3% on a year-over-year basis. The adjusted EBITDA margin contracted 280 basis points year over year to 9.7%.
Balance Sheet and Cash Flow
FTI Consulting exited the quarter with cash and cash equivalents of $238.5 million compared with the prior quarter’s $491.7 million. Long-term debt was $360.6 million compared with the $315.2 million witnessed at the end of the previous quarter. FCN used $254.2 million of net cash in operating activities, whereas CapEx was $18 million.
OMC’s earnings of $1.56 per share beat the Zacks Consensus Estimate by 13% and our estimate by 11.4%. EPS increased 12.2% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 2.3% and our estimate by 1.4%. The top line increased 1% year over year.
EFX’s adjusted earnings were $1.43, beating the consensus mark by 4.4% but declining 35.6% from the year-ago figure. Total revenues of $1.3 billion surpassed the consensus estimate by 1.5% but decreased 4.5% year over year.
MAN’s adjusted earnings of $1.61 per share lagged the consensus mark by 0.6% but matched our estimate. Revenues of $4.8 billion missed the consensus mark by 1.3% and our estimate by a slight margin. The top line decreased 7.6% year over year.
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FTI Consulting (FCN) Falls 2.5% Following Q1 Earnings Miss
Shares of FTI Consulting, Inc. (FCN - Free Report) declined 2.5% since the first-quarter 2023 earnings release in response to earnings missing estimates.
Adjusted earnings per share of $1.34 missed the Zacks Consensus Estimate by 19.8% and our estimate by 19.3%, decreasing 19.3% on a year-over-year basis.
Total revenues of $806.7 million surpassed the consensus mark by 2.4% and our estimate by 3%, rising 11.5% on a year-over-year basis.
The stock has gained 6.8% in the past year against the 1.9% decline of the industry it belongs to.
Quarterly Numbers in Detail
Forensic and Litigation Consulting revenues increased 12.7% year over year to $173.4 million. The uptick was primarily driven by higher demand for investigations, data & analytics, and health solutions services.
Strategic Communications revenues increased 4.5% year over year to $73.1 million. The upside can be attributed to higher demand for corporate reputation services.
Technology revenues increased 12.6% year over year to $90.6 million. The improvement was primarily driven by higher demand for investigations and litigation services, partially offset by lower demand for information governance, and privacy & security services.
Economic Consulting revenues increased 2.2% year over year to $169.6 million. The increase can be attributed to higher demand for merger and acquisition (“M&A”)-related antitrust services and higher realization for non-M&A-related antitrust services, partially offset by lower demand for non-M&A-related antitrust services.
Corporate Finance & Restructuring revenues increased 18.4% year over year to $300 million. The uptick was primarily on higher demand for restructuring and business transformation services, partially offset by a decrease in demand for transaction services.
Operating Results
Adjusted EBITDA was $78.4 million, down 13.3% on a year-over-year basis. The adjusted EBITDA margin contracted 280 basis points year over year to 9.7%.
Balance Sheet and Cash Flow
FTI Consulting exited the quarter with cash and cash equivalents of $238.5 million compared with the prior quarter’s $491.7 million. Long-term debt was $360.6 million compared with the $315.2 million witnessed at the end of the previous quarter. FCN used $254.2 million of net cash in operating activities, whereas CapEx was $18 million.
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Recent Earnings Snapshots of Some Service Providers
Omnicom (OMC - Free Report) reported better-than-expected first-quarter 2023 results.
OMC’s earnings of $1.56 per share beat the Zacks Consensus Estimate by 13% and our estimate by 11.4%. EPS increased 12.2% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 2.3% and our estimate by 1.4%. The top line increased 1% year over year.
Equifax (EFX - Free Report) also reported better-than-expected first-quarter 2023 results.
EFX’s adjusted earnings were $1.43, beating the consensus mark by 4.4% but declining 35.6% from the year-ago figure. Total revenues of $1.3 billion surpassed the consensus estimate by 1.5% but decreased 4.5% year over year.
ManpowerGroup (MAN - Free Report) reported lower-than-expected first-quarter 2023 results.
MAN’s adjusted earnings of $1.61 per share lagged the consensus mark by 0.6% but matched our estimate. Revenues of $4.8 billion missed the consensus mark by 1.3% and our estimate by a slight margin. The top line decreased 7.6% year over year.