Weak Guidance Clips Shares of the Corporate Executive Board

Originally Published In the News February 7, 2008 8:55 AM

One way to survive the bear market of 2001-’03 was by getting long the shares of Stericycle and the Corporate Executive Board.

And while Stericycle continues to deliver, the shares of Corporate Executive Board (EXBD-NASDAQ) have basically imploded, and the company’s earnings guidance is leaving shareholders out in the cold.

Revenue came in on the light side and a lower tax rate masked the weak results.

The Washington, D.C.-based company estimates a profit of $2.06 to $2.22 per share in 2008, while analysts polled by Thomson Financial expected $2.46 per share. Although the company’s fourth-quarter results surpassed their estimates, analysts were troubled by the falling value of Corporate Executive Board’s contracts. AP

Apparently issues in the sales force are weighing on results. The business model here was once a thing of beauty, the strong cash flow was always something to hang your hat on. But the stock is getting pummeled today, and is off more than a hat size.

I had not noticed that Morgan Stanley has acquired over 20% of the company’s share count as of September 30th, but somebody there has a near $100 million haircut to contend with today.

That has got to leave a mark.

Corporate Executive Board Stock Dives to 4-Year Low on 2008 Outlook and Contract Questions
AP

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