FTI Consulting Inc. (FCN): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

Summary:

FTI Consulting reported strong third-quarter 2014 results as adjusted earnings of $0.63 per share beat the Zacks Consensus Estimate of $0.41, on the back of broad-based top line growth. A focused strategy to expand through acquisitions, particularly in the international markets, remains one of its key growth drivers. In addition, management's plan to drive profitability by restructuring the business and enhancing shareholders' value through share repurchase are likely to be favorable. However, increased competition and pricing pressure due to market volatility undermine its growth prospects to some extent. As such, we are changing our long-term recommendation on the stock from Outperform to Neutral as we anticipate it perform in line with the broader market.

Overview:

Based in Baltimore, Maryland, and founded in 1982, FTI Consulting Inc. provides specialized consulting services across 24 foreign countries with a total headcount of more than 3,900 employees. The company has a team of highly qualified professionals, who provide problem-solving and technology services primarily to major corporations, financial institutions and law firms. The company's client list comprises a large percentage of the Fortune 500 companies, the FTSE 100 companies, as well as the majority of the largest 25 banks and the top 100 law firms in the world. The company's five main business segments include Corporate Finance and Restructuring, Forensic and Litigation Consulting, Strategic Communications, Technology, and Economic Consulting.

The Corporate Finance and Restructuring segment focuses on strategic, operational, financial and capital needs of businesses. It provides consulting and advisory services related to turnaround, performance improvement, lending solutions, financial and operational restructuring, restructuring advisory, mergers and acquisitions, transaction advisory, and interim management.

The Forensic and Litigation Consulting segment provides law firms, companies, government clients and other interested parties with end-to-end forensic and litigation services including pre-filing assessments, discovery, trial preparation, expert testimony, and other trial support services.

The Strategic Communications segment provides advice and consulting services related to financial communications, brand communications, public affairs and reputation management, and business consulting.

The Technology segment provides products, services and consulting to law firms, corporations and government agencies, and also focuses on collection, preservation, review and production of electronically stored information.

The Economic Consulting segment provides law firms, companies, government entities and other interested parties with a clear analysis of complex economic issues for legal and regulatory proceedings, strategic decision making, and public policy debates in the United States and beyond.

FTI Consulting is actively pursuing inorganic growth opportunities. In February 2008, FTI purchased Rubino McGeehin Consulting Group (RMCG), a consulting company in the construction and government contracts sector, and Brewer Consulting, a U.K.-based company providing dispute, resolution and procurement services to the construction, engineering, transportation, and oil and gas industries. In March 2008, the company completed the purchase of New York City-based, The Schonbraun McCann Group (SMG), a consulting firm in the real estate industry, and also acquired Forensic Accounting LLC (FA), a U.K.-based independent forensic accounting practice. FTI Consulting also expanded its global footprint in the Technology segment with the purchase of San Francisco-based Strategic Discovery Inc., a leader in the litigation discovery industry, which will serve as a bridge to the Asian market, and TSC Brasil, a computer forensic and information technology consultant in the Brazilian and certain Latin American markets. Two other international acquisitions were Thomson Market Services, an investigation company in China that helps clients protect their brands and intellectual properties in that region, and Blueprint Partners, a public affairs consultancy in Brussels. In March 2011, FTI Consulting acquired the majority of LECG Corporation's remaining European operations. In October 2012, FTI acquired Australia-based KordaMentha (Qld) (KMQ), which will provide impetus to its corporate finance advisory restructuring segment as well as strengthen its presence in Australia.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.