FTI Consulting (FCN) Declines 4% Despite Q2 Earnings Beat

Core Insights - FTI Consulting, Inc. reported strong second-quarter 2024 results, with earnings per share of $2.34 exceeding the Zacks Consensus Estimate by 19.4% and increasing 33.7% year over year, while total revenues reached $949.2 million, surpassing the consensus mark by 2.1% and growing 9.8% from the previous year [1] Revenue Growth by Segment - Technology revenues rose 18.9% year over year to $115.9 million, driven by increased demand for M&A-related "second request" services, although partially offset by lower demand for investigation services [2] - Economic Consulting revenues increased 14.4% from the year-ago quarter to $230.9 million, supported by higher demand and realized bill rates for M&A-related antitrust and financial economics services, despite lower demand for non-M&A-related antitrust services [3] - Corporate Finance & Restructuring revenues grew 9.5% year over year to $348 million, attributed to higher demand and realized bill rates for business transformation and strategy services, although lower restructuring revenues had a dampening effect [4] - Strategic Communications revenues climbed 2.8% year over year to $84.9 million, primarily due to a $1.7 million increase in pass-through revenues and public affairs revenues, offset by lower corporate reputation revenues [5] - Forensic and Litigation Consulting revenues rose 2.9% year over year to $169.5 million, supported by higher demand for dispute services and increased realized bill rates for construction solutions, despite lower demand for investigation services [6] Margin Expansion - Adjusted EBITDA for the quarter was $115.9 million, reflecting a 15.7% year-over-year increase, with the adjusted EBITDA margin climbing 60 basis points to 12.2% [7] Balance Sheet and Cash Flow - At the end of the quarter, FTI Consulting had cash and cash equivalents of $226.4 million, down from $244 million in the prior quarter, with long-term debt standing at $60 million [8] - The company generated $135.2 million in cash from operating activities during the quarter, with capital expenditures amounting to $10.1 million [8] 2024 Guidance - FTI Consulting has raised its 2024 revenue guidance to a range of $3.7 billion to $3.79 billion, compared to the previous expectation of $3.65 billion to $3.79 billion, while the midpoint of the revised range is slightly lower than the current Zacks Consensus Estimate [9] - The company estimates EPS to range between $8.10 and $8.60, an increase from the prior estimate of $7.75 to $8.50, with the midpoint of the revised range also lower than the current Zacks Consensus Estimate [9]