Miss Mows Down Omnicare

Omnicare (OCR Quote) can't seem to get back on its feet.

The giant institutional pharmacy suffered through another painful quarter -- with customer losses and low payments from UnitedHealth (UNH Quote) still hurting results -- as the company fell short of Wall Street targets once again. While net income rose nearly six-fold to $49.2 million in the second quarter, lifted by recent accounting changes, operating profits of 51 cents a share missed the consensus estimate by 2 cents. Revenue, down slightly to $1.55 billion, came up a bit short as well.

Cut-rate payments from UnitedHealth, which Omnicare hopes to remedy in court, continued to hit the company hard. Omnicare estimates that those scaled-back payments lowered profits by $32.3 million, or 16 cents a share, in the second quarter alone. The company pegs the total damages at $131 million, or 67 cents a share, since the dispute began last year.

Unfortunately, Omnicare doesn't expect to recover any time soon. Rather, the company has lowered its full-year guidance to $2.15 to $2.20 a share -- well below the $2.28 consensus estimate -- as it struggles to overcome ongoing challenges.

"As 2007 unfolds, we continue to view the year as a building year, one in which we work to resolve prior challenges and move ahead with those activities that enhance shareholder value," CEO Joel Gemunder stated on Thursday. "We have seen some stabilization in the trends that impacted our first-quarter results, and we remain committed to making further progress toward reinvigorating our growth and improving profitability. ... Longer-term, we believe the fundamentals in our business remain intact."

Omnicare's stock remains under pressure in the meantime. Shares fell $1 Thursday morning to $31.93.