WASHINGTON: FTI Consulting’s strategic communications unit reported a 17.7% year-over-year drop in third-quarter revenue to $45.8 million.
Without measuring the impact of foreign currency exchange, the strategic communications segment’s revenue dropped 14% year-over-year.
The advisory firm attributed the decrease to lower pass-through revenues amounting to $8.5 million compared with Q3 2015.
"While it was a soft quarter, it’s not quite as dramatic as it looks," said Ed Reilly, global CEO of strategic communications at FTI. "We had this anomalous situation where we made a rather large media buy last year; it did not repeat itself this year."
He contended that professional fees are a better indicator of financial performance than revenue, and said the strategic consulting group posted an increase of roughly $700,000 year-over-year, excluding FX. Reilly also noted the Brexit vote in the U.K. affected the firm’s bottom line.
"We did have an impact with Brexit in our London and Brussels offices, which are significant parts of our network. That hit us pretty hard at the end of June, July, and early August, but things appear to be reverting to the norm as we move on from the shock of that vote."
FTI saw year-over-year revenue drops in all of its business segments except for economic consulting. The corporate finance and restructuring unit saw a 2.5% decrease in revenues to $110.6 million, while forensic and litigation consulting reported a 1% drop to $115 million, and technology reported a 20.7% decrease in revenue to $44.1 million. Revenues for the economic consulting unit grew by 6.9% to $122.5 million.
For the company as a whole, revenues were down 3.8% in the quarter to $438 million, and they dropped by 2% excluding the impact of foreign currency translation. Net income was up 110.4% to $21.7 million in Q3.
The company does not break out organic changes, which represent change in revenue without taking into account the impact of acquisitions or disposals.
Last month, FTI rolled out a geopolitical intelligence practice to provide political and policy analysis and bespoke consulting and corporate advisory services. Many of the new unit’s staffers come from the strategic communications group.
This story was updated on October 27 with comment from Reilly.
Editor's note: Information was added on October 28 to clarify the approximate amount of FTI's professional fees.