Why Shares of FTI Consulting, Inc. Plunged Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of advisory firm FTI Consulting, (NYSE: FCN  ) fell 15% today after reporting earnings.

So what: Fourth-quarter revenue rose 4.2% to $416 million and came in ahead of the $402.4 million estimate from analysts. On the bottom line, earnings of $0.49 per share was also $0.05 ahead of estimates, but guidance for the first quarter was for earnings of $0.20-$0.28 per share, well below the $0.58 analysts expected.  

Now what: This is the classic case of a company beating estimates but guiding lower than expected and the stock dropping like a rock. Next year's guidance compares to $0.59 per share in earnings in the first quarter of 2013, so profits are expected to be down significantly. This flies in the face of management's glowing appraisal of the business to end 2013 and the weak outlook would keep me out of the stock today.

Get into a high potential stock today
FTI Consulting may not be a great buy today, but there are still great stocks on the market. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2847247, ~/Articles/ArticleHandler.aspx, 10/31/2014 3:54:19 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement