A few days before PharmaNet Development Group’s surprise positive second quarter earnings report on July 30, we were wondering if the contract research organization (CRO) could pull off another comeback—one much smaller than its turnaround of the former SFBC.

There were many questions. What would its cancellation rate be this quarter? Could it return to profitability? Could management do it again?

While we didn’t have many guesses or prognostications, we did know a number of fundamentals about PharmaNet and the contract research industry that could give us clues because we’ve been covering both here at CenterWatch for years. The company’s current management, led by Jeffrey P. McMullen, its president and chief executive officer, had done the real hard work of righting the ship after the debacle left by the former SFBC’s management. If management could do that job, making a comeback for a quarter was much less of a monumental task.

PharmaNet had done well in CenterWatch investigative site surveys about the quality of CRO relationships. But, in difficult times with any company, it often usually comes down to how the management performs under fire. Given with what they did with SFBC, we thought they had a good shot.

Well, PharmaNet did it again. The company blew by analysts’ expectations when it reported second quarter earnings. A lot of money was made Thursday for some investors.  PharmaNet’s shares closed up 33.7% Thursday at $24.13.

In its second quarter, the company swung to a profit with net income of $2.2 million, or 11 cents a share, compared with a net loss of $4.5 million, or 24 cents, in the prior year quarter. Estimates from analysts were four cents a share.

PharmaNet’s second quarter revenue jumped 13% to $96.8 million. The company stuck with its 2008 guidance for net income of 53 cents to 63 cents on a range of revenue of $390 million to $399 million.

Early stage development was strong with revenue jumping 40% to $43 million.

The medium and long-term trends for global CROs such as PharmaNet remain very strong. CRO performance quarter-to-quarter still can be very lumpy, as projects get delayed or canceled by pharma companies. While the industry has been around for a while, that lumpiness is something investors have to be reminded of from time to time.