FCN – FTI Consulting, Inc. – Shares of business advisory firm, FTI Consulting, Inc., plunged 27.1% to touch an intraday and new 52-week low of $31.53 after the company cut its outlook for the year and revealed second-quarter results are likely to disappoint. The stock is currently trading 26.45% lower on the day to stand at $31.83 as of 11:10 am (ET). The consulting company, and provider of forensic accounting in the Madoff Ponzi scheme, said Tuesday it expects to earn $0.50 to $0.55 a share in the second quarter, which is drastically lower than the average earnings of $0.75 a share anticipated by analysts. FTI Consulting also slashed its full year earnings outlook estimated in February from $3.00 to $3.25 a share to its new forecast of $2.50 to $2.80 per share. The firm’s significantly reduced outlook for the year inspired analysts at both Oppenheimer & Co. and William Blair & Co. to cut their ratings on FCN to ‘market perform’ from ‘outperform’ today. Options investors were quick to initiate near-term bearish transactions on the stock. Traders bracing for continued erosion in the price of the underlying stock purchased at least 1,100 puts at the July $30 strike for an average premium of $0.33 per contract. Put buyers at this strike are positioned to profit should shares decline 5.9% from the intraday low of $31.53 to breach the average breakeven point to the downside at $29.67 by July expiration. Other pessimistic players sold 1,000 calls at the July $35 strike to pocket an average premium of $0.68 per contract. Call sellers keep the full premium received on the transaction as long as FCN’s shares fail to trade above $35.00 by expiration day. The overall reading of options implied volatility on the stock shot up 41.6% to 51.47% by 11:25 am (ET).
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