Quintiles shares fell 3 percent on Thursday even though the pharmaceutical services company's second-quarter performance outpaced Wall Street's expectations.
Those results were "overshadowed" by soft bookings, an indicator of future revenue, analyst Eric Coldwell of Robert W. Baird & Co. wrote in a research note.
Quintiles shares closed at $54.93, down $1.89. The Durham-based company's shares are up 18 percent this year.
Quintiles' second-quarter revenue rose 9.7 percent from a year ago to $1.035 billion. After adjusting for currency fluctuations, revenue rose 8.6 percent.
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Adjusted net income totaled $85.7 million, up 36.2 percent from a year ago. That amounted to earnings per share of 65 cents, compared with 60 cents anticipated by analysts polled by Thomson Reuters.
"I'm pleased to report another quarter of strong performance," Tom Pike, CEO of the Durham-based company, said Thursday during a conference call.
The revenue growth was driven by the company's integrated health care services business, or IHS, which rose 15.6 percent in the quarter.
That growth was "underpinned by strong new business wins over the prior three quarters," Pike said.
IHS, which accounted for one-fourth of overall revenue in the quarter, provides drug companies with sales forces that promote products to physicians. It also provides "real-world research" on drugs that are already on the market, which can help companies gather intelligence on competing drugs and fashion marketing pitches.
Pike and Kevin Gordon, the company's chief financial officer, also said they were pleased with the performance of Quintiles' mainstay product development business, which posted a 6.7 percent gain in revenue. That business helps drug companies test experimental drugs and analyze the results.
But some analysts, such as John Kreger of William Blair & Co. and Wells Fargo's Tim Evans, were expecting stronger growth on the product development side.
On the bookings side, overall bookings rose 21.2 percent. Product development bookings totaled $870 million in the quarter, but analyst Coldwell was anticipating $968 million.
Higher-than-average cancellations, which Pike said can occur from time to time in the industry, affected product development billings.
"We had one large cancellation happen very late in the quarter, and it had an impact," he said. "It's not a trend."
Coldwell, the analyst, wrote that he was "less concerned about a single trial cancellation (especially in context of recent bookings trends) and more focused on pipeline near historical highs."
Quintiles, the world's largest pharmaceutical services company, has 2,400 employees in the Triangle and more than 30,000 worldwide.