WEST PALM BEACH, FL: FTI Consulting's strategic communications unit reported a revenue drop of 12.9% year over year to $46.6 million in the second quarter of 2012.
The strategic communications group also posted a $1.3 million operating loss in the quarter, partly due to a $28 million pre-tax income charge related to layoffs and consolidated office space. The group's adjusted EBITDA was $4.9 million in the period.
FTI attributed the unit's revenue decline to lower pass-through revenues in North America, fewer M&A projects in Asia-Pacific, and pricing pressures on retainer fees in EMEA and North America.
Jack Dunn, the company's president and CEO, said in an earnings statement that strategic communications “continues to face one of the worst environments for capital markets activity and M&A transactions since 2009 and 2004, respectively.”
The company's overall revenue decreased to $396.2 million from $400.4 million in the quarter, compared with Q2 2011. FTI achieved $26.8 million in operating income and $7.7 million in net income in the period.
Its corporate finance and restructuring unit reported revenue growth of 10.2%, while technology revenue decreased 16.5% to $47.7 million from $57.1 million, year over year.
In July, FTI said it was laying off 115 employees, or 3% of its workforce, and consolidating leased office space at six locations. But the company told PRWeek job cuts in its strategic communications unit were minimal.
FTI estimated that the layoffs and consolidations will result in operational savings of $14 million for the rest of this year.
Andrew Waterworth, MD in strategic comms and head of the financial services marketing communications practice, is leaving FTI. His departure follows that of Geoffrey Pelham-Lane, president of the global strategic communications practice at FTI Consulting, who left the firm July 27.
FTI's strategic communications group also reported a 2.9% year-over-year revenue drop in the first quarter of this year, which it attributed to a difficult market in Europe.