Bergen Brunswig Shares Decline to 52-Week Low
Shares of Bergen Brunswig Corp. slipped to a 52-week low Friday in heavy trading, as analysts suggested that investors appear to have grown impatient waiting for positive news from the struggling distributor of drugs.
The stock, which has lost more than 81% of its value over the last year, closed Friday at $4.94, down 63 cents a share, on the New York Stock Exchange. Earlier in the session, the shares sank to $4.81. The shares slipped 11% Thursday.
Trading volume has been heavy for most of the week, spiking up to just over 1 million shares Wednesday, then to 2.4 million Thursday and more than 4.5 million Friday. The average daily trading volume is about 850,000 shares.
Analysts and a company representative said there was no news reported Friday that could have prompted the stock movement, but earlier in the week a leading credit rating agency again downgraded its ratings on the Orange-based company’s debts, citing Bergen’s need to find working capital and improve cash flow.
Bergen Brunswig supplies pharmaceuticals, medical-surgical supplies and specialty health care products as well as information management solutions and consulting services.
One analyst, who asked not to be identified, speculated that some investors “might be getting tired” of waiting for the company to right itself. “We’d like to see them get rid of some of the money-losing operations and raise some cash to pay down debt and improve their balance sheet.”
Bergen has stumbled with some of its acquisitions, “and we’d like to see some divestiture here,” agreed Robert Willoughby, an analyst with Credit Suisse First Boston Corp.
“But right now they don’t have a CEO, so it’s kind of a ship being run by the board of directors and, therefore, unlikely to make any major changes for the time being,” he said, referring to former Chief Executive Donald Roden’s Nov. 4 departure.
Credit Suisse First Boston rates the stock a hold, the same as it has since it began coverage in August, Willoughby said.
On Jan. 27, Bergen Brunswig reported that fiscal first-quarter net income fell 47%, and it said it won’t meet its 2000 earnings-per-share growth target--a percentage gain in the low to mid-teens. The company has cited disappointing results from two units that it acquired, specialty-drug distributor Stadtlander and PharMerica, which supplies pharmacy services to nursing homes.
