Why Shares of FTI Consulting, Inc. Plunged Today

Before you go, we thought you'd like these...
Before you go close icon

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, 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.

The article Why Shares of FTI Consulting, Inc. Plunged Today originally appeared on Fool.com.

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

13 People Recount Their First Kiss Horror Stories 13 People Recount Their First Kiss Horror Stories
Large Numbers Of Horses Are Being Stuffed Into These Crates For A Despicable Reason Large Numbers Of Horses Are Being Stuffed Into These Crates For A Despicable Reason
Man Suspects His Wife Is Cheating On Him - Then His Daughter Reveals What's Really Going Man Suspects His Wife Is Cheating On Him - Then His Daughter Reveals What's Really Going