Cancellations spook analysts as PPD shares slide

PPD's clinical research work ginned a bigger profit in the last quarter than the market had estimated, but its shares nevertheless slid 16 percent as the analysts zeroed in on high cancellations and weak bookings for the months ahead.

"The new business wins were $115 million below our expectation and cancellations were $60 million higher. That's an unfortunate combination," Jefferies & Co analyst David Windley tells Reuters. "That is the second quarter in a row of very weak new business wins."

PPD won $465 million in new business in the second quarter, but lost close to $213 million in contract cancellations. The company earned $58.1 million, but some of the analysts feared that the 49 cent per share profit was driven largely by cost cutting.

"PPD's position in the market may be waning as lower-margin and more aggressive marketing organizations appear to be taking share," said Robert W. Baird analyst Eric Coldwell.

- read the story from Reuters