Corporate Executive Board Helps Keep Execs In The Know

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It sounds great, being an executive. The pay is nice, the perks are many, and you get your own parking spot.

But between all the power lunches and golf outings, there's this: You have to perform.

If you sit around enjoying the perks and patting yourself on the back, you'll soon find yourself knee-deep in problems you don't know how to solve. It won't be long before you can add the title "former executive" to your CV.

That's why the best and brightest execs aren't content to lie around admiring the reflection in the mirror. They seek advice, training and research from companies like the Corporate Executive Board ( CEB ), or CEB.

CEB provides data analysis, research and advisory services to executives and professionals in the U.S., Europe and elsewhere.

The bulk of its work focuses on best-practice programs for various executive functions, including Human Resources, Strategy and Management, Information Technology, Sales and Marketing, Corporate Finance, Legal and Governance, Innovation and Operations, and Financial Services.

Timely Research

Such tools are important in a corporate world that seems to turn on a dime whenever some new economic, political or financial event occurs, analysts say.

"CEB conducts research into timely issues that members of any executive suite might face, and produces best-practice guidelines and tools for its members to implement these practices," said Shlomo Rosenbaum, an analyst at Stifel Nicolaus.

The company sells its research on an annual subscription basis. Each subscription gives members access to best-practice studies, educational seminars, research briefs and online access to data resources and other tools.

CEB has sold subscriptions to more than 5,900 members worldwide. The majority of its revenue, 69%, comes from the U.S. Europe accounts for 18% of revenue, and other regions produce the rest.

Like many companies, CEB's financial results suffered during the economic downturn and financial crisis as corporations tightened spending for research and analysis tools. The company reported two straight years of lower sales and earnings in 2009 and 2010.

But results improved last year with CEB logging a slight earnings gain and a 12% year-over-year rise in revenue.

The company has really turned on the jets the last three quarters. Earnings have risen at least 42% during that time, while sales have gained at least 13%.

The recent growth has come as customers continue to grapple with the sluggish U.S. economy and debt problems in Europe.

CEB executives reckon its products and services are especially important in a challenging operating environment.

"We think in this environment our resources match up very well against the challenges people have," Chief Executive Tom Monahan said on a conference call following CEB's second-quarter earnings announcement.

"Our teams are doing a great job finding ways to make sure we're connecting in conversations and through technology with those problems," he continued. "(We're) giving (members) real immediate returns on their investments with us."

CEB's total number of members during the second quarter increased 9.9% from the prior year to 5,909, according to a note from analyst Daniel Leben of Baird Equity Research.

The company posted second-quarter earnings of 48 cents a share. That was up 60% from the prior year, the highest gain in years, and well ahead of estimates. Revenue rose 16% to $135.7 million, also above views.

Revenue per customer climbed 2.1% to $86,800. On a sequential basis, the figure rose by $1,300 with midsize businesses comprising the bulk of new clients.

"From a selling standpoint, management mentioned that its performance remained strongest in the North America and Asia Pacific markets, while Europe continues to experience difficulty in obtaining new business," Leben noted.

"As far as verticals are concerned, management stated that in general all verticals are meeting expectations and growing at a similar pace," he added.

Earnings Report

CEB reported Q2 results July 30. A day later, the stock shot up 9.6% to a 4-1/2-year closing high of 46.11. Shares pushed as high as 48.32 on Aug. 17.

Meanwhile, the company changed its ticker symbol to CEB from EXBD Aug. 13. It also recently approved a cash dividend on its common stock for the third quarter of $0.175 per share.

CEB maintained its 2012 revenue guidance of $535 million to $555 million, up from $485 million last year. Earnings guidance was raised to a range of $1.90 to $2.05 a share vs. prior guidance of $1.75 to $2. Last year, the company earned $1.53 a share.

Part of CEB's growth will come from its purchase of U.K.-based SHL, a provider of cloud-based talent measurement and management solutions. That deal closed on Aug. 2.

"The addition of SHL to CEB's portfolio creates a uniquely valuable resource to help executives apply predictive analysis to the selection, development and management of talent," CEO Monahan said in a statement.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas

Referenced Stocks: CEB

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