Updated from 8:45 a.m. EST
The bottom was falling out of
Universal Health Services
in the premarket after the company said it fired its chief financial officer after a bizarre flap with its auditor.
Universal, which also reported solid earnings growth Thursday night, said it replaced CFO Kirk Gorman after the auditor, KPMG, determined it could no longer rely on his representations. KPMG made the determination after receiving a letter from Gorman "regarding his views on their respective responsibilities and the level of expertise required of a chief financial officer with respect to the company's financial statements.
"KPMG has concluded that, because of Mr. Gorman's communication regarding the responsibilities and required expertise of a chief financial officer, it could no longer rely on the representations made by Mr. Gorman as the CFO of the company," Universal said, without elaborating.
The company stressed that no issues were raised about the integrity of its books. Gorman was replaced with Steve Filton, the controller. On Instinet, the shares were recently down $6.95, or 17%, to $35.
A number of other hospital companies were also weaker.
was off 7% to $20.33 and
was down 6% to $37.01 after both were downgraded by Fulcrum in the wake of the Universal Health news.
was down 1% to $34.38 and
was down 2% to $16.76.
Universal also said it earned $43.9 million, or 69 cents a share, in its latest fourth quarter compared with $927,000, or 2 cents a share, a year earlier. Universal's fourth quarter 2002 results included a gain of 2 cents per share from the sale of real estate; the year-ago period included a 46-cent charge.