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FTI Consulting (FCN - Free Report) reported dismal second-quarter 2017 results with adjusted earnings of $16.1 million or 40 cents per share compared with $27.6 million or 66 cents per share in the year-earlier quarter. Adjusted earnings missed the Zacks Consensus Estimate of 53 cents.
Revenues for the quarter declined 3.4% to $444.7 million and missed the Zacks Consensus Estimate of $455 million. Excluding the estimated negative impact of foreign currency translation, revenues decreased 1.6% year over year on lower demand for restructuring services in North America in the Corporate Finance & Restructuring segment.
Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) for the quarter was $40.8 million, down from $56.6 million in the prior-year quarter, owing to lower revenues and higher operating expenses.
Segmental Details
Corporate Finance & Restructuring revenues were $117.5 million, down 11.1% year over year due to lower demand for restructuring services globally. Adjusted EBITDA for the segment was $20 million, down from $32 million in the year-ago quarter, due to lower revenues.
Economic Consulting revenues increased to $124 million from $118 million in the prior-year quarter, largely driven by higher demand for antitrust services in North America. Adjusted EBITDA came in at $15.5 million versus $15.4 million in the prior-year quarter, due to lower revenues.
Forensic and Litigation Consulting revenues fell to $111.4 million in the quarter from $118.2 million in the year-earlier quarter, driven by lower demand for advisory and health solutions. Adjusted EBITDA for the segment decreased to $13 million from $15.2 million on lower revenues.
Technology revenues increased to $45.6 million from $41.9 million in the prior-year quarter on higher consulting demand related to merger and acquisitions. Adjusted EBITDA increased to $5.4 million from $5 million in the year-ago quarter.
Strategic Communications revenues decreased to $46.2 million from $49.9 million in the prior-year quarter, due to a decline in project-based revenues in North America. Adjusted EBITDA for the segment was $4.9 million compared with $8.4 million in the prior-year quarter, largely due to lower revenues.
Balance Sheet & Cash Flow
FTI Consulting had cash and cash equivalents of $138.5 million as of Jun 30, 2017. Total debt was $480.9 million at the end of the first six months. Net cash used in operating activities in the first six months of 2017 was $82.2 million against net cash of $40.6 million generated in the year-ago period.
The company repurchased 1,887,033 shares during the quarter at an average price of $34.74 per share for $65.6 million. As of Jun 30, 2017, FTI Consulting had approximately $78.9 million worth of shares available under its $200.0 million share repurchase authorization.
FTI Consulting, Inc. Price, Consensus and EPS Surprise
FTI Consulting reaffirmed its guidance for 2017. The company continues to expect revenues to be approximately $1.775–$1.875 billion. It, however, lowered GAAP earnings guidance. It currently expects it to be within $1.37 to $1.67 per share, down from $1.75–$2.10 projected earlier. The company continues to expect adjusted earnings per share in the range of $1.90–$2.20.
The company currently carries a Zacks Rank #4 (Sell)
Exponent pulled off an average positive surprise of 10.1% over the trailing four quarters, beating estimates thrice.
NV5 Global pulled off an average positive surprise of 1.8% over the trailing four quarters, beating estimates twice.
Gartner pulled off an average positive surprise of 4.6% over the trailing four quarters, beating estimates thrice.
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FTI Consulting (FCN) Misses Q2 Earnings, Revenues Decline
FTI Consulting (FCN - Free Report) reported dismal second-quarter 2017 results with adjusted earnings of $16.1 million or 40 cents per share compared with $27.6 million or 66 cents per share in the year-earlier quarter. Adjusted earnings missed the Zacks Consensus Estimate of 53 cents.
Revenues for the quarter declined 3.4% to $444.7 million and missed the Zacks Consensus Estimate of $455 million. Excluding the estimated negative impact of foreign currency translation, revenues decreased 1.6% year over year on lower demand for restructuring services in North America in the Corporate Finance & Restructuring segment.
Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) for the quarter was $40.8 million, down from $56.6 million in the prior-year quarter, owing to lower revenues and higher operating expenses.
Segmental Details
Corporate Finance & Restructuring revenues were $117.5 million, down 11.1% year over year due to lower demand for restructuring services globally. Adjusted EBITDA for the segment was $20 million, down from $32 million in the year-ago quarter, due to lower revenues.
Economic Consulting revenues increased to $124 million from $118 million in the prior-year quarter, largely driven by higher demand for antitrust services in North America. Adjusted EBITDA came in at $15.5 million versus $15.4 million in the prior-year quarter, due to lower revenues.
Forensic and Litigation Consulting revenues fell to $111.4 million in the quarter from $118.2 million in the year-earlier quarter, driven by lower demand for advisory and health solutions. Adjusted EBITDA for the segment decreased to $13 million from $15.2 million on lower revenues.
Technology revenues increased to $45.6 million from $41.9 million in the prior-year quarter on higher consulting demand related to merger and acquisitions. Adjusted EBITDA increased to $5.4 million from $5 million in the year-ago quarter.
Strategic Communications revenues decreased to $46.2 million from $49.9 million in the prior-year quarter, due to a decline in project-based revenues in North America. Adjusted EBITDA for the segment was $4.9 million compared with $8.4 million in the prior-year quarter, largely due to lower revenues.
Balance Sheet & Cash Flow
FTI Consulting had cash and cash equivalents of $138.5 million as of Jun 30, 2017. Total debt was $480.9 million at the end of the first six months. Net cash used in operating activities in the first six months of 2017 was $82.2 million against net cash of $40.6 million generated in the year-ago period.
The company repurchased 1,887,033 shares during the quarter at an average price of $34.74 per share for $65.6 million. As of Jun 30, 2017, FTI Consulting had approximately $78.9 million worth of shares available under its $200.0 million share repurchase authorization.
FTI Consulting, Inc. Price, Consensus and EPS Surprise
FTI Consulting, Inc. Price, Consensus and EPS Surprise | FTI Consulting, Inc. Quote
Guidance
FTI Consulting reaffirmed its guidance for 2017. The company continues to expect revenues to be approximately $1.775–$1.875 billion. It, however, lowered GAAP earnings guidance. It currently expects it to be within $1.37 to $1.67 per share, down from $1.75–$2.10 projected earlier. The company continues to expect adjusted earnings per share in the range of $1.90–$2.20.
The company currently carries a Zacks Rank #4 (Sell)
Stocks to Consider
Some better-ranked stocks in the same space include Exponent, Inc. (EXPO - Free Report) , Gartner, Inc. (IT - Free Report) and NV5 Global, Inc. (NVEE - Free Report) . Exponent sports a Zacks Rank #1 (Strong Buy), while Gartner and NV5 Global both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Exponent pulled off an average positive surprise of 10.1% over the trailing four quarters, beating estimates thrice.
NV5 Global pulled off an average positive surprise of 1.8% over the trailing four quarters, beating estimates twice.
Gartner pulled off an average positive surprise of 4.6% over the trailing four quarters, beating estimates thrice.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early. See Zacks' 3 Best Stocks to Play This Trend >>