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Accredo Health


shares sank early Monday after the health care company reported a sharply lower first-quarter profit.

Net earnings at the Memphis, Tenn.-based company decreased 27% to $12.8 million, or 26 cents a share, for the quarter ended Sept. 30, compared with $17.5 million, or 36 cents a share, a year ago. Analysts expected 36 cents a share, based on a Thomson Fist Call survey.

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Revenue increased 24% to $416.1 million.

"Consistent with the recent reductions to our fiscal 2005 estimates, we continue to face pressure on the gross margin line due to declining reimbursement levels, particularly related to government payers," the company said. "Furthermore, our current-quarter revenue mix includes more products with a lower margin profile than our historical book of business."

Nevertheless, the company reaffirmed its 2005 revenue and EPS estimates of $1.85 billion to $1.90 billion and $1.45 to $1.53, respectively, including a small write-off of debt issuance costs. The consensus estimates are $1.87 billion and $1.54 a share.

Shares fell $1.53, or 6.6%, to $21.50, near their 52-week low.