About a month has gone by since the last earnings report for FTI Consulting, Inc. FCN. Shares have added about 1.9% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
FTI Consulting Beats Q3 Earnings, Revenues In Line
FTI Consulting reported healthy third-quarter 2017 results with adjusted earnings of $31.4 million or 83 cents per share compared with $21.7 million or 52 cents per share in the year-earlier quarter. Adjusted earnings comfortably beat the Zacks Consensus Estimate of 61 cents.
Revenues for the quarter improved 2.5% year over year to $449 million and matched the Zacks Consensus Estimate. The increase in revenues was primarily driven by higher revenues in the Corporate Finance & Restructuring segment.
Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) for the quarter was $57.4 million, up from $47.2 million in the prior-year quarter, owing to higher margin revenues, improved utilization and lower selling, general and administrative expenses.
Segmental Details
Corporate Finance & Restructuring revenues were $128.1 million, up 15.8% year over year due to higher demand for restructuring services globally. Adjusted EBITDA for the segment was $26.7 million, up from $17.8 million in the year-ago quarter due to higher revenues and improved utilization.
Economic Consulting revenues decreased to $111.8 million from $122.5 million in the prior-year quarter, largely driven by lower demand for antitrust services in North America. Adjusted EBITDA came in at $12.1 million versus $18.4 million in the prior-year quarter, due to lower revenues.
Forensic and Litigation Consulting revenues increased to $118.6 million in the quarter from $115 million in the year-earlier quarter, driven by higher demand for forensic accounting and advisory services and construction solutions offerings, partially offset by lower success fees in health solutions. Adjusted EBITDA for the segment increased to $22.5 million from $16.6 million on higher revenues.
Technology revenues decreased to $42.3 million from $44.1 million in the prior-year quarter on lower demand for managed review and lower pricing for hosting services, partially offset by higher demand for consulting services. Adjusted EBITDA fell to $6 million from $7.4 million in the year-ago quarter due to a decline in higher margin hosting-related revenues.
Strategic Communications revenues increased to $48.2 million from $45.8 million in the prior-year quarter due to retainer-based revenues, partially offset by lower pass-through revenues. Adjusted EBITDA for the segment was $8.1 million compared with $7.5 million in the prior-year quarter, largely due to higher revenues.
Balance Sheet & Cash Flow
FTI Consulting had cash and cash equivalents of $158 million as of Sep 30, 2017. Total debt was $461.1 million at the end of the first nine months of 2017. Net cash from operating activities in the first nine months of the year was $24 million compared with $111.6 million generated in the year-ago period.
The company repurchased 1,599,400 shares during the quarter at an average price of $32.98 per share for $52.7 million. As of Sep 30, 2017, FTI Consulting had approximately $26.1 million worth of shares available under its $200 million share repurchase authorization.