McKesson Falls On Financing Worries For Pharmacies

By MARLEY SEAMAN

NEW YORK (AP) — Shares of McKesson Corp. skidded Wednesday due to concerns that one of the pharmacy benefits manager's biggest customers, drugstore operator Rite Aid Corp., could default on its loans this year.

On Tuesday, Moody's Investors Service published a quarterly list called "The Bottom Rung," a list of 283 companies that face the greatest risk of defaulting on their loans and have little access to cash. Rite Aid was included on the list, and an analyst for Deutsche Bank said some smaller independent pharmacies are also "highly likely" to go bankrupt.

In afternoon trading, shares of McKesson fell $5.68, or 13.6 percent, to $36.24.

Analyst Ross Muken said Rite Aid would not go bankrupt just because it has defaulted on a loan payment, but he wrote that investors are concerned Rite Aid's business will be harmed further by the recession. He said McKesson got 13 percent of its revenue from Rite Aid in 2008, and the company also does a lot of business with independent pharmacies that may not survive the slump.

He said as much as 50 cents per share of McKesson's 2009 profit could be at risk. The company expects to earn $4.15 to $4.30 per share this year, excluding one-time items.