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McKesson misses earnings, cuts outlook amid drug pricing scrutiny; shares plunge

Shares of McKesson plunged 22.67 percent Friday after the company posted earnings and revenue that missed forecasts.

The company also cut its outlook for the full-year amid recent drug pricing scrutiny in the U.S.

McKesson shares posted their worst session since April 1999 when it fell 47.5 percent.

The company reported fiscal second-quarter earnings on Thursday of $2.94 per share on revenue of $49.96 billion, missing expectations for $3.05 per share on sales of $51.43 billion.

The company lowered its full-year outlook to a range of between $12.35 a share and $12.85 a share, from a previous range of between $13.43 a share and $13.93 per share.

"Our updated outlook for fiscal 2017 reflects McKesson's expectation of a lower profit contribution resulting from recent customer pricing activities and lower operating profit as a result of further moderating branded pharmaceutical pricing trends compared to previous expectations," Chairman and CEO John Hammergren said in a statement.

Several firms on Friday downgraded the stock. RW Baird downgraded it to "neutral" from "outperform" with a price target of $164 from $200. Leerink Partners downgraded the stock to "market perform" from "outperform," pricing it at $160 from $230. And Deutsche Bank downgrades it to a "hold" from a "buy" and priced it at $153 from $196.

After the earnings report, Cardinal Health's and AmerisourceBergen's shares, competitors to the company, also fell.

McKesson's stock is down 37 percent year-to-date.

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