FTI Consulting’s (FCN) second quarter 2010 earnings were in line with the Zacks Consensus Estimate. The company’s corporate/restructuring segment remains a drag on its growth due to softer trend in bankruptcy work and a slowdown in larger cases. The Technology segment is also struggling due to pricing.
Moreover, the company is experiencing a tepid pace of recovery in the mergers & acquisitions markets. Additionally, progress in its other segments such as Economic Consulting, Strategic Communications and Forensic and Litigation Consulting businesses is slower than expected.
Overall, the near-term visibility remains unclear, as demand environment for practices remains uncertain given the current market volatility and clients cautious aggregate spending. Going forward, we remain skeptical about the growth prospects of the company. Hence, we downgrade the stock from Neutral to Underperform.