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2 Solid Earnings Reports - Foster Wheeler and FTI Consulting

 May 07, 2008 12:38 PM
 

Knock on wood but we continue a strange streak of no major earnings blowouts from the myriad fund holdings. I had reduced both positions going into earnings to reduce risk, but looks like both came through quite well.

As opposed to Huron Consulting (HURN) which we sold out of yesterday, peer FTI Consulting (FCN) just continues to execute quarter after quarter; beat estimates and raise guidance - par for the course for these guys. All the drivers that should be driving HURN are in fact driving FCN. All this earnings growth even with a large share count increase (nearly a quarter) - even more impressive.
  • 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.

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