NEW YORK (TheStreet) -- FTI Consulting (FCN) - Get Report was falling 8.9% to $31.25 Thursday after issuing a guidance that falls below analysts' expectations for earnings in the second quarter, and despite positive first quarter results.
For the first quarter FTI Consulting reported earnings of 41 cents a share, beating the Capital IQ Consensus Estimate of26 cents a share by 15 cents. Revenue grew 4.5% from the year-ago quarter to $425.6 million. Analysts expected revenue of $15.03 million for the quarter.
Looking to the second quarter FTI Consulting expects earnings of 32 cents to 42 cents a share, below analysts' expectations of 47 cents a share. The company forecasts revenue of $430 million to $445 million for the quarter, while analysts expect $423.87 million.
TheStreet Ratings team rates FTI CONSULTING INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate FTI CONSULTING INC (FCN) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- FTI CONSULTING INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, FTI CONSULTING INC continued to lose money by earning -$0.31 versus -$0.99 in the prior year. This year, the market expects an improvement in earnings ($1.79 versus -$0.31).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Professional Services industry. The net income increased by 91.7% when compared to the same quarter one year prior, rising from -$85.88 million to -$7.14 million.
- FCN's debt-to-equity ratio of 0.69 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that FCN's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.90 is high and demonstrates strong liquidity.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Professional Services industry and the overall market, FTI CONSULTING INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $89.47 million or 16.04% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: FCN Ratings Report
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.