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Biotech / Medical : McKesson HBOC (MCK) -- Ignore unavailable to you. Want to Upgrade?

To: Doug who wrote (68)	4/30/1999 1:02:00 PM
From: Tom_	Read Replies (1) \| Respond to of 165

Re: problem larger than 42MM? Hi Doug! Let's see if I understand you correctly. MCK has announced 26.6MM contingent sales for 4Q, to be deducted from previously stated revenues, and 16MM to be deducted from prior quarters, for a total of 42.6MM. However, MCK has also lowered its guidance from $3.00 EPS for the next fiscal year to $2.50. OK, let's use the Yahoo Finance figure of appx 260MM shares outstanding. You're saying that a 50 cent revision thus amounts to $130MM, and only $42.6MM of that has been accounted for so far. If that is what you are saying I see the logic to it, (even allowing for a difference between revenues and net earnings). But I am wondering how 88MM of contingent sales could have been wrongly booked in the four weeks between the end of the March quarter and the revision announcement on April 28th. My uniformed guess is that there is a disconnect between the announced contingent/"shortfall" figures and the revised guidance; that MCK is playing things safe. And/or that MCK was extrapolating, based on the wrongly reported past figures, to get to its $3.00 estimate, not that there is actually another immense boatload of contingent orders out there. They'd look a more than a bit negligent if they come out in a few weeks and say oops, not 42MM, but 88MM more. I can't see it. JMO. I hope I've interpreted your concern correctly. Best wishes, Tom