FTI Consulting Earnings Preview

Investors never know what to expect for FTI Consulting (NYSE: FCN  ) , as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest earnings Thursday. FTI Consulting is a business advisory firm dedicated to helping organizations protect and enhance their enterprise value in difficult and increasingly complex economic, legal, and regulatory environments.

What analysts say:

• Buy, sell, or hold?: Analysts think investors should stand pat on FTI Consulting with seven of 10 analysts rating it hold. Analysts don't like FTI Consulting as much as competitor Huron Consulting Group overall. Two out of six analysts rate Huron Consulting Group a buy compared with three of 10 for FTI Consulting. Analysts still rate the stock a hold, but they are a bit more wary about it compared with three months ago.
• Revenue Forecasts: On average, analysts predict $393.8 million in revenue this quarter. That would represent a rise of 12.8% from the year-ago quarter.
• Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.56 per share. Estimates range from $0.50 to $0.60.

What our community says:
CAPS All-Stars are solidly behind the stock with 96.9% awarding it an "outperform" rating. The community at large backs the All-Stars with 97.2% assigning it a rating of "outperform." Fools are gung-ho about FTI Consulting, though the message boards have been quiet lately with only 78 posts in the past 30 days. FTI Consulting has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
FTI Consulting's income has fallen year over year by an average of 22.8%. The company's revenue has now risen for two straight quarters. The company's gross margin shrank by 4.2 percentage points in the last quarter. Revenue rose 3.4% while cost of sales rose 11% to $219.1 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter	Q1	Q4	Q3	Q2
Gross Margin	39.4%	42.4%	41.0%	40.1%
Operating Margin	13.4%	9.7%	14.4%	14.9%
Net Margin	6.0%	3.0%	6.3%	7.2%

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