FTI Consulting Trims 2010 Outlook – Analyst Blog

FTI Consulting Inc. (FCN), a Florida-based business advisory firm recently reduced its 2010 guidance as its corporate/restructuring segment remains a drag on growth based on softer trends in bankruptcy work and a slowdown in the Merger & Acquisition environment. Moreover, its Technology segment is also struggling as price contraction continues. Additionally, progress in its other segments like Economic Consulting, Strategic Communications and Forensic and Litigation Consulting businesses are slower than expected.

 

For the fiscal year 2010, management is now forecasting revenues in the range of $1.40 billion and $1.45 billion versus its previous prediction of $1.47 billion to $1.57 billion. Operating earnings per share outlook has been cut down to a range of $2.50 and $2.80 versus $3.00 and $3.25 earlier. However, the Zacks Consensus Estimate for fiscal year 2010 is $3.05, representing an annualized growth of 1.98%.  

 

FTI Consulting has trimmed its fiscal year 2010 projection for the second time in a row. In February, the company had cut its outlook owing to uncertain economic conditions.

 

FTI Consulting also provided preliminary second quarter 2010 results. For the second quarter of 2010, the company expects to report earnings between 50 cents to 55 cents and revenues of approximately $350 million. However, the Zacks Consensus Estimate for the second quarter is 75 cents per share, representing an annualized growth of 8.83%. 

 

With respect to earnings surprises, over the trailing four quarters, FTI Consulting outperformed the Zacks Consensus Estimate for three quarters and missed out in one. The average earnings surprise was a positive 5.67%. This implies that the company has beaten the Zacks Consensus Estimate by the same magnitude over the last four quarters.

 

FTI Consulting is slated to release its second-quarter 2010 results on August 2. Its competitor CRA International Inc. (CRAI) is expected to release its results on September 30 and Navigant Consulting Inc. (NCI) will report on July 19.

 

We maintain a Zacks #2 Rank on FTI Consulting, which translates into a short-term Buy recommendation.