FTI Consulting 1st-quarter profit more than doubles
BALTIMORE—Business advisory firm FTI Consulting Inc. said Wednesday its first-quarter profit more than doubled, surpassing Wall Street's expectations, as fallout from the subprime mortgage mess spurred strong revenue growth across all business segments.
For the three months ended March 31, the company reported income of $31.3 million, or 59 cents per share, compared with $15.3 million, or 36 cents per share, in the year-ago period.
The per-share results reflect a 24 percent increase in the number of shares outstanding in the 2008 quarter, to 52.7 million, from 42.5 million in the 2007 quarter.
Revenue jumped 35 percent to $307.1 million, from $227.7 million in the first quarter of 2007.
Analysts polled by Thomson Financial, on average, estimated earnings of 47 cents per share on revenue of $287.1 million.
Revenue from the company's technology segment grew 71 percent, to $56.5 million, while sales from its corporate finance and restructuring division increased 28 percent, to $79.3 million. Revenue in this segment was driven by increasing demand from sectors affected by the housing downturn, such as building materials, retail, consumer durables and insurers, FTI said. There was also strong demand from the health care sector for both consulting and restructuring services.
Strategic communications revenue grew 43 percent and economic consulting revenue gained 41 percent due to credit and liquidity issues and strategic merger-and-acquisition assignments.
"The global credit crisis in its various forms continued to be a significant driver of work across all of our business segments," said Jack Dunn, president and chief executive, in a statement. "Subprime issues remained unresolved and the housing market continued to erode, undermining consumer net worth and confidence."
The company closed seven acquisitions in the first quarter, and two additional acquisitions in the first week of April, adding more than 400 employees. Going forward, the company said it has a full acquisition pipeline and will continue to "aggressively" pursue acquisitions throughout 2008.
