Benchmark Gives Depressed Outlook For 2011 On eResearch Technology

Benchmark has published a research report on a eResearch Technology ERES after the company reported decent 4Q earnings but softness in the bookings, leading to depressed outlook for 2011. In the report, Benchmark writes "Revenue in Q4 was $44.9 million as compared with the $43.3 million consensus and our $43.0 million forecast. Pro-forma Q4 EPS of $0.12 exceeded the $0.10 consensus and our $0.08 forecast. Despite the Q4 beat, Management cautioned that 2011 would be an “investment year,” meaning that it plans at least $5.7 million in 2011 spending to enhance long term operating efficiency. Bookings trends were soft in Q4 and a large project was delayed or canceled, such that Q1 guidance is now well below the analyst consensus. Pro-forma 2011 EPS is guided to $0.40-$0.50, as compared with the $0.50 analyst consensus. We increased our 2011 EPS forecast to $0.33 from $0.31. Our target remains $5.00 based on a 20x multiple of the average of our $0.33 pro-forma and $0.20 GAAP EPS estimates." Benchmark maintains its Sell rating and $5 price target. eResearch Technology closed yesterday at $6.38.