Will FTI Consulting (FCN) Q1 Earnings Benefit From Tax Cuts?
Zacks Investment Research | Apr 23, 2018 10:12PM ET
FTI Consulting, Inc. (NYSE:FCN) is scheduled to report first-quarter 2018 results on Apr 26, before the opening bell.
The top line is expected to benefit from strength across Corporate Finance and Restructuring, Forensic and Litigation Consulting, Strategic Communications segments, while the bottom line is likely to be positively impacted by tax benefits.
We observe that shares of FTI Consulting have rallied 38.6% in the past six months, outperforming the industry ’s gain of 6.4%.
Top Line to Improve Year Over Year
FTI Consulting operates through five main business segments - Corporate Finance and Restructuring, Forensic and Litigation Consulting, Strategic Communications, Technology and Economic Consulting.
Corporate Finance & Restructuring segment revenues are likely to be driven by higher demand for restructuring services and favorable foreign currency movements. The Zacks Consensus Estimate for this segment’s revenues is pegged at $120 million, reflecting year-over-year growth of 13.3%. In fourth-quarter 2017, segment revenues advanced 15.2% year over year to $130.5 million.
Forensic and Litigation Consulting segment revenues are expected to rise on the back of higher demand for global investigations and litigation services.The Zacks Consensus Estimate for this segment’s revenues is pegged at $118 million, reflecting year-over-year growth of 5.9%. In fourth-quarter 2017, segment revenues climbed 14.6% year over year to $120.9 million.
Higher retained revenues from public affairs and corporate reputation services in Europe, the Middle East and Africa are likely to boost Strategic Communications segment revenues. The Zacks Consensus Estimate for this segment’s revenues is pegged at $51 million, reflecting year-over-year growth of 16.7%. In fourth-quarter 2017, segment revenues increased 8% year over year to $54.3 million.
Revenues from the Economic Consulting segment are likely to decline due to lower demand for antitrust services. The Zacks Consensus Estimate for this segment’s revenues is pegged at $121 million, reflecting a year-over-year decline of 13.1%. In fourth-quarter 2017, segment revenues decreased 6.4% year over year to $121.1 million.
Decrease in demand for managed review services is likely to weigh on Technology segment revenues. The Zacks Consensus Estimate for this segment’s revenues is pegged at $41.32 million, reflecting a year-over-year decline of 10.4%. In fourth-quarter 2017, segment revenues declined 5.9% year over year to $40.9 million.
Strength across Corporate Finance and Restructuring, Forensic and Litigation Consulting, Strategic Communications segments will contribute significantly toward year-over-year growth of FTI Consulting’s total revenues, the Zacks Consensus Estimate for which is currently pegged at $456.01 million, reflecting year-over-year growth of 2.2%. In fourth-quarter 2017, revenues rose 5.8% from the year-ago quarter to $467.7 million.
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