McKesson Profit Revision Sends Its Shares Plunging

Pharmaceutical supply giant McKesson HBOC Inc. stunned investors Wednesday by revising downward its latest quarterly earnings and projecting lower profit through early 2000.

The company’s stock plummeted nearly 50%, losing $31.25 to close at $34.50 on the New York Stock Exchange.

San Francisco-based McKesson, which acquired health-care information management firm HBO & Co. in January, said it lost 27 cents a share in its fiscal fourth quarter ended March 31, compared with a 22-cent loss originally reported.

In its first report last week, the company said it lost $60.4 million in the quarter. It did not provide a comparable revised figure on Wednesday.

McKesson, which counts health-care software as its most profitable business line, said the results were restated after sales of software were reduced to account for certain “contingencies.”

The term was not defined, but analysts surmised that the company may have sold software under trial terms that auditors later determined did not contribute to revenue.

McKesson, again citing weaker-than-expected software sales, also lowered its profit target for the current year to $2.50 a share. Wall Street analysts surveyed by First Call Corp. had forecast $2.94 a share.

Given all of the buildup to the $12-billion deal to purchase HBOC, McKesson’s management will have a hard time regaining the trust of the investment community, Wheat First Union analyst Christopher McFadden said.