* Large cancellation hits product development segment
* Shares fall nearly 6 pct
* Co raises 2014 service revenue, adjusted EPS forecast (Adds details from conference call, analysts’ comments and share movement)
July 31 (Reuters) - Quintiles Transnational Holdings Inc , the world’s largest medical contract research provider, posted lower-than-expected growth in its product development (PD) segment, sending its shares down almost 6 percent.
A large cancellation at the end of the second quarter hit growth in the company’s main PD segment, which provides clinical trial services and research.
The product development unit accounted for more than three-fourths of the company’s total second-quarter service revenue.
“PD results were mixed, as were bookings in the segment,” ISI Group LLC analyst Ross Muken said in an email.
Brokerage Robert W. Baird & Co said in a note that the company’s net PD bookings of $870 million had missed its estimate of $968 million due to higher-than-average cancellations in the quarter.
Quintiles, which has beaten Wall Street profit estimates in every quarter since going public in May last year, posted a stronger-than-expected quarterly profit due to higher growth in its integrated healthcare services segment.
However, this was the company’s smallest earnings beat in the past five quarters.
Quintiles said service revenue rose 9.7 percent to $1.04 billion in the quarter ended June 30, driven by a 15.6 increase in sales of its integrated healthcare services, which include marketing and consulting services to biopharmaceutical companies.
Net income attributable to Quintiles more than doubled to $85.1 million, or 64 cents per share, in the quarter, from $38.5 million, or 30 cents per share, a year earlier.
Excluding items, the company earned 65 cents per share.
Analysts on average expected a profit of 61 cents per share on revenue of $1.03 billion, according to Thomson Reuters I/B/E/S.
Quintiles also raised its full-year adjusted earnings forecast to $2.57-$2.67 per share and its service revenue outlook to $4.20-$4.24 billion. The company had earlier expected to post 2014 adjusted earnings of $2.45-$2.58 per share and service revenue of $4.13-$4.19 billion.
Analysts on average expect the company to earn $2.56 per share on revenue of $4.15 billion in 2014, according to Thomson Reuters I/B/E/S.
Quintiles’ competitor Covance Inc reported a better-than-expected profit on Tuesday due to strong growth in its early-stage drug-development segment.
Quintiles’ shares were trading down 5.6 percent at $53.62 on the New York Stock Exchange on Thursday. The stock hit a record high of $57.31 on Wednesday. (Reporting by Anand Basu; Editing by Simon Jennings)