FTI Consulting stock tumbles after weak guidance

Investing.com -- Shares of FTI Consulting (NYSE:FCN) fell sharply by 13% following the release of its fourth-quarter financial results and guidance that fell short of analyst expectations. The professional services firm reported fourth-quarter earnings per share (EPS) of $1.56, which was $0.17 below the consensus estimate of $1.73. Quarterly revenue was also lower than anticipated, coming in at $894.9 million versus the expected $932.18 million.

The company’s guidance further disappointed investors. FTI Consulting expects full-year 2025 EPS to be between $7.80 and $8.60, compared to the consensus estimate of $8.68. Revenue projections for the same period are anticipated to be between $3.66 billion and $3.81 billion, which is below the consensus estimate of $3.903 billion.

FTI Consulting’s fourth-quarter revenue saw a 3% decrease compared to the $924.7 million reported in the same quarter of the previous year. The full-year revenue for 2024, however, did increase by 6% to $3.699 billion compared to $3.489 billion in the prior year. The company attributed the annual revenue growth to increases across all business segments.

Despite achieving record revenues for the full year, the company’s second-half performance did not meet expectations due to various headwinds, some of which are anticipated to continue into 2025. President and Chief Executive Officer Steven H. Gunby stated, "Though a number of headwinds that we saw towards the end of 2024 resulted in second-half performance that was below our expectations, we are pleased that, in aggregate, 2024 was yet another year of record revenues and earnings per share."

The company also announced a special charge in the first quarter of 2025, estimated at approximately $17 million, related to the alignment of staffing with demand. This charge is in addition to the $8.2 million special charge taken in the fourth quarter of 2024. These measures, affecting approximately 4% of the company’s workforce, are expected to result in cost savings of around $70 million in salary and benefits-related compensation costs for the full year 2025.

FTI Consulting’s stock reaction reflects investor concerns over the company’s near-term growth prospects and the effectiveness of its cost-saving measures. As the market digests the latest financial figures and forward-looking statements, FTI Consulting’s future performance will be closely monitored.

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