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What happened

Shares of PAREXEL International Corporation (NASDAQ:PRXL), a biopharmaceutical services company that provides clinical research, logistics, and medical communications consulting, sank as much as 13% during Thursday's trading session following the release of its fiscal 2017 first-quarter earnings report. As you can surmise by the move lower, PAREXEL's report didn't live up to Wall Street's lofty expectations.

So what

For the quarter, PAREXEL announced revenue of $500.9 million, a 2.2% decline from the $512.1 million the company reported in Q1 2016. According to chairman and CEO Josef H. von Rickenbach, "Revenue in the quarter was impacted by higher than expected cancellations, project delays, and continued slow backlog conversion." The report lists a backlog of $5.8 billion, which is a $365 million increase over the prior-year period. Cancellations totaled $364 million during the first quarter of 2017.

In the profit department, PAREXEL reported adjusted earnings per share of $0.76, which was modestly higher than the $0.70 in adjusted EPS it delivered in the year-ago period.

However, when we bring these figures together, we see they both fell short of Wall Street's expectations. The Street had been looking for $524.8 million in revenue and $0.86 in adjusted EPS for Q1 2017. Furthermore, PAREXEL lowered the bottom end of its full-year profit guidance to a new range of $3.71 to $4.05 in adjusted EPS, from an August forecast of $3.79 to $4.05. The company also lowered the midpoint of its revenue guidance by about $20 million.

All hope isn't lost, though, as PAREXEL's board also authorized the repurchase of up to $200 million worth of stock, or more than 6% of its outstanding shares.

Now what

PAREXEL has been generating pretty consistent growth for years, so today's first-quarter flop is a bit of a surprise. The fact that management chose to ever-so-slightly reduce the company's full-year revenue and profit guidance at the midpoint is suggestive that this may not be an issue that's confined solely to the company's fiscal first quarter.

On the other hand, PAREXEL's backlog remains healthy, and it did head in the right direction during Q1 2017, even if cancellations were higher than Wall Street and investors would like to see. At $5.8 billion, PAREXEL's backlog covers more than two-and-a-half years' worth of revenue in a space that seems to be growing by the mid- to high single digits annually.

Though it certainly would require a deeper dive, PAREXEL looks to be a case of a broken stock at the moment, and not a broken business model. If its share price continues to decline, it could be worth a serious look by long-term investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.