Kendle shares rise on 3Q profit, outlook

The stock gained $4.26, or 20 percent, to $25.60 in morning trading. Shares have traded between $16.11 and $52 over the last 52 weeks.

Late Tuesday, the company said it earned just under $11 million, or 73 cents per share, up from profit of $3.8 million, or 25 cents per share, in the third quarter of last year. Revenue rose 27 percent to $181.1 million from $142.4 million.

Service revenue rose 25 percent during the quarter to $124.8 million. Reimbursements comprised the rest of the revenue.

Analysts polled by Thomson Reuters expected profit of 56 cents per share on service revenue of $125.9 million.

Clinical research organizations, despite a lagging economy, have been growing because of research and development outsourcing from big pharma and biotech companies. Kendle said new business awards for the quarter rose 21 percent to $212 million.

The company expects full-year profit between $2.10 and $2.25 per share on service revenue between $485 million and $500 million. Previously, the company expected profit between $2 and $2.15 per share on revenue between $490 million to $500 million.

Analysts expect 2008 profit of $2.04 per share on revenue of $493.4 million.

"Over the past few years, management has focused on increasing Kendle's geographic reach, service breadth and depth, and therapeutic expertise," wrote Robert W. Baird analyst Eric Coldwell in a note to investors. "As a result, Kendle is now truly a global player, as evidenced by strong business development performance and increased capture of large late-stage global trials."

He reaffirmed a "Outperform" rating, saying demand for clinical research services remains exceptional.