FTI Consulting Inc.
), a global investment advisory firm, has recently redeemed $86.7
million worth of 7 3/4% senior notes due 2016, the redemption
price of which was 102.58% of the principal amount plus accrued
interests. The transaction was funded with the proceeds from the
just-concluded debt offering of 6.0% senior notes due 2022 along
with available cash in hand.
FTI CONSULTING (FCN): Free Stock Analysis
NAVIGANT CONSLT (NCI): Free Stock Analysis
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Owing to the debt redemption, the company is expected to incur a
pre-tax charge of $4.5 million in fourth quarter 2012. This is
likely to reduce its earnings by about 7 cents per share. The
pre-tax charge is primarily intended to reflect an estimated loss
on early extinguishment of debt and subsequent redemption of the
Earlier in the previous month, FTI Consulting reported third
quarter 2012 adjusted earnings of 60 cents per share, which beat
the Zacks Consensus Estimate by a penny. The earnings, however,
fell short of the year-ago earnings of 70 cents per share.
Total revenue in the last reported quarter slipped 6.7% year over
year to $386.1 million and also lagged the Zacks Consensus
Estimate of $389.0 million. Revenue dropped mostly due to the
relatively weak performances of Technology, Forensic and
Litigation Consulting, and the Strategic Communications segment.
Adjusted EBITDA slid 13.7% from the year-ago quarter to $62.3
million and Adjusted EBITDA margin decreased 150 basis points
(bps) to 16.1%. As of September 30 2012, FTI Consulting's cash
and cash equivalents totaled $126.9 million, compared with $264.4
million as of December 31, 2011.
The company remains focused on investment in areas of domain
expertise such as healthcare, energy, communications, media and
entertainment, and insurance. FTI Consulting also aims to
capitalize on geographic opportunities such as investment in the
Australian restructuring practice. Further, though the insecurity
over the Presidential election is over, overall uncertainty in
the global market, looming fiscal cliff and the lingering impact
of Hurricane Sandy prevail.
We maintain our Neutral recommendation on the stock, which
presently has a Zacks #3 Rank that translates into a short-term
Hold rating. We also have a Neutral recommendation and a Zacks #2
Rank (short-term Buy rating) for
Navigant Consulting Inc.
), one of the competitors of FTI Consulting.