WASHINGTON: FTI Consulting’s strategic communications revenue grew 1.2% in Q1 to $58.4 million.
The growth rate was considerably smaller than the 9.3% year-over-year growth FTI reported in Q1 2019, a result that shows “without doubt the impact of the virus,” said global strategic comms leader Mark McCall, as clients shifted focus from reputation to the pandemic.
The first quarter of 2019 was also a record quarter, and it’s difficult for any business to produce consecutive growth of 9% to 10% even in a favorable business environment, he added.
“Our team did a remarkable job pivoting from a very robust transaction-focused environment to a COVID-19 environment, which helped with our clients thinking through the crisis response,” McCall said. “But the business was definitely impacted and will continue to be impacted.”
McCall added that the company did not reduce staff in response to COVID-19-related pressures.
“The M&A market has really been soft. We’re still doing a few transactions, but the restructuring market picked up pace and ongoing reputation work, we’re still doing quite a bit, particularly in Europe,” he said. “Clients are more focused, as they should be on the immediate crisis.”
The strategic communications segment at FTI often works in tandem with other business units including the corporate finance and restructuring group. Revenues for that segment jumped 29.1% to $207.7 million in Q1.
First-quarter revenue for the forensic and litigation consulting segment rose 6.2% to $147.6 million. In the economic consulting segment, revenue dropped 7.1% to $132.1 million. For the technology segment, Q1 revenue rose 14.4%, to $58.7 million.
FTI’s overall Q1 revenue rose 9.7% to $604.6 million. Net income declined 9.4% to $56.7 million. The company blamed that change on an “18.5% rise in billable headcount and higher variable compensation, as well as higher selling, general and administrative expenses,” in an earnings statement.