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FTI Consulting (FCN) Q1 Earnings Beat Estimates, Fall Y/Y

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·4 min read
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FTI Consulting, Inc. FCN delivered impressive first-quarter 2022 results, with both earnings and revenues beating the Zacks Consensus Estimate.
Adjusted earnings per share (excluding 6 cents from non-recurring items) of $1.66 surpassed the Zacks Consensus Estimate by 24.8% but decreased 12.2% on a year-over-year basis.

Total revenues of $723.6 million beat the consensus mark by 3% and rose 5.4% on a year-over-year basis. The uptick was driven by higher demand across all business segments, except Economic Consulting.

FTI Consulting, Inc. Price, Consensus and EPS Surprise

FTI Consulting, Inc. Price, Consensus and EPS Surprise
FTI Consulting, Inc. Price, Consensus and EPS Surprise

FTI Consulting, Inc. price-consensus-eps-surprise-chart | FTI Consulting, Inc. Quote

Revenues by Segment

Forensic and Litigation Consulting revenues increased 2% year over year to $153.9 million. The uptick was primarily driven by acquisition-related revenues, higher realized bill rates and demand for investigations services. The segment contributed 21.3% to total revenues.

Strategic Communications revenues increased 15.6% year over year to $69.9 million. The uptick can be attributed to higher demand for corporate reputation services. The segment contributed 9.66% to total revenues.
Technology revenues increased 1.3% year over year to $80.5 million. The upside resulted from higher demand for information governance, privacy and security, cross-border investigations and litigation services. The segment contributed 11% to total revenues.

Economic Consulting revenues were down 1.9% year over year to $166 million. The downside can be attributed to a decline in demand for M&A-related antitrust services. The segment contributed 22.9% to total revenues.

Corporate Finance & Restructuring revenues increased 12% year over year to $253.3 million. The uptick was primarily on higher demand for business transformation and transactions services, partially offset by lower demand for restructuring services. The segment contributed 35% to total revenues.

Operating Results

Adjusted EBITDA was $90.5 million, down 9% on a year-over-year basis. The decrease in Adjusted EBITDA was primarily caused by an increase in compensation. Adjusted EBITDA margin contracted 200 basis points year over year to 12.5%.

Balance Sheet and Cash Flow

FTI Consulting exited the first quarter with cash and cash equivalents of $271.1 million compared with the prior quarter’s level of $494.5 million. Long-term debt was $328.9 million compared with $297.2 million witnessed at the end of the previous quarter. FCN generated $203.8 million of net cash from operating activities, while CapEx was $12.6 million.

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.

Earnings Snapshots

Within the broader Business Services sector, ManpowerGroup Inc. MAN, Omnicom Group Inc. OMC and Equifax Inc. EFX recently reported first-quarter 2022 results.

ManpowerGroup reported impressive first-quarter 2022 results, with both earnings and revenues beating the Zacks Consensus Estimate. Quarterly adjusted earnings of $1.88 per share beat the consensus mark by 20.5% and improved 69.4% year over year. Revenues of $5.14 billion surpassed the consensus mark by 0.7% and inched up 4.5% year over year on a reported basis and 9.8% on a constant-currency (cc) basis.

Omnicom reported impressive first-quarter 2022 results as both earnings and revenues surpassed the Zacks Consensus Estimate. Earnings of $1.39 per share beat the consensus mark by 8.6% and increased 4.5% year over year, driven by a strong margin performance. Total revenues of $3.4 billion surpassed the consensus estimate by 5.4% but declined slightly year over year.

Equifax reported better-than-expected first-quarter 2022 results. Adjusted earnings of $2.22 per share beat the Zacks Consensus Estimate by 3.3% and improved 13% on a year-over-year basis. Revenues of $1.36 billion outpaced the consensus estimate by 2.4% and improved 12.4% year over year on a reported basis and 13% on a local-currency basis.


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