It doesn't take much in today's world to let the air out of a stock. On Tuesday evening, Corporate Executive Board (NASDAQ:EXBD) announced earnings that were essentially solid, topping both the prior year and analysts' expectations. But the company's look ahead to the current quarter and year resulted in a per-share price loss of about 15% by Wednesday.

For the quarter, the company's revenues grew 26% to $125.5 million, from $99.8 million in the final quarter of 2005. Its earnings for the quarter were $23.2 million, or $0.58 per share, versus $21.3 million, or $0.52 per share, in the last quarter of the prior year. Without its stock-based compensation costs, Corporate Executive's adjusted profit for the most recent quarter was $0.68 a share (see our Fool by Numbers).

Analysts apparently had been anticipating about $125.8 million in revenues for the Dec. 31 quarter, and approximately $0.56 in per-share earnings. So far, so good.

But commensurate with the release of its results, the company forecast a 2007 profit of $2.39 per share on about $553 million in revenues. The expectation had been for revenues to reach $573.6 million for the year, resulting in earnings per share of about $2.42. So, on a $0.03 reduction in per-share earnings expectations, the company's shares, which had closed at $95.42 on Tuesday, opened below $80 on Wednesday.

In announcing the results for the quarter that ended in December, Corporate Executive Board CEO Tom Monahan was generally upbeat. "We are very pleased," he said, "to have delivered well against our stated revenue and EPS objectives for 2006. While contract value growth of 24.7% came in below our objective for Q4, we continued to see strength across most of our key growth drivers. [The] client renewal rate for the full year was 92%, and the cross-sell ratio -- the average number of subscriptions per member institution -- rose from 3.91 to 4.15 in our traditional large company market."

But Corporate Executive Board is essentially a consulting firm, and it competes in a tough market. The company provides research, decision support tools, and executive education, primarily to corporations in the United States. Companies that are similar to one degree or another include Gartner (NYSE:IT), Resources Connection (NASDAQ:RECN), FTI Consulting (NYSE:FCN), and Advisory Board (NASDAQ:ABCO). And because analysts who follow the company are unable to "widget up" their financial models -- estimating an output of products and multiplying by average expected prices to forecast revenues -- management's guidance becomes even more crucial to the coverage process than in, say, more basic manufacturing industries.

How, then, should Fools with an interest in CEB approach the company's shares today? Prior to the earnings release, two-thirds of the analysts following the company had rated it at least a buy. And a three-penny reduction in expectations seems a rather slim provocation for the loud whooshing sound that the company's stock emitted after the close on Tuesday. Having said that, this probably is a company to watch closely, but not leap into, for the time being.

For related Foolishness:

Corporate Executive Board is a Motley Fool Stock Advisor pick. To find out why, and to see all past picks and how they've performed, take a 30-day free trial of our flagship newsletter.

Fool contributor David Lee Smith does not own shares in any of the companies mentioned. He welcomes your comments or questions. The Fool's disclosure policy advises you to check your tire pressure regularly.