The Five Dumbest Things on Wall Street This Week

3. Omnicare Fool Potential

Omnicare (OCR Quote) can't seem to live up to its billing.

Shares of the Covington, Ky., pharmaceutical services company plunged 11% Tuesday after Omnicare posted soft third-quarter earnings and slashed full-year guidance.

Some observers had suspected a bad quarter was on the way. Omnicare has been struggling to integrate a big acquisition and to figure out the Medicare Part D reimbursement game. The shutdown of a drug-repackaging plant hasn't helped either.

But it was surprising indeed to see labor costs on the rise three just months after Omnicare set a bold plan to slash expenses.

"At Omnicare, we continually seek opportunities to streamline our operating infrastructure to improve customer service and maximize efficiencies," CEO Joel Gemunder said back in July. "This process, which builds on the 'hub-and-spoke' concept we have been developing for some time, has led us to the point where we are now ready to undertake 'Omnicare Full Potential.'"

The hub-and-spoke concept obviously hasn't reached its full potential, given the latest quarter's mess. But at least it makes more sense than most of Gemunder's comments on Tuesday's conference call.

"It became extremely difficult to try to remove what we call excess labor because the cascade effect happens when you have something like this," Gemunder said, TheStreet.com's Melissa Davis reported. "In other words, it takes longer to get bingo cards processed internally."

Obviously, Omnicare's number hasn't been coming up lately.

Dumb-o-Meter score: 88. Gemunder said on Tuesday that he feels "proud that we kept the wheels on the metaphoric wagon."