Tokos Medical Corp. Stock Plunges 34%

SANTA ANA —  Tokos Medical Corp. shares plummeted 34% Tuesday after company officials said fourth-quarter profit will likely fall below analysts’ estimates.

The stock’s fall--down $8.50 to close at $16.12 in heavy over-the-counter trading--was another reminder from Wall Street of the volatility of health care issues.

“It kind of goes with the territory, I guess,” said Craig T. Davenport, president of Tokos, the nation’s leading manufacturer and provider of in-home pregnancy monitors and services. The company’s machines detect the onset of premature labor in pregnant women.

About 4.3 million shares--more than 20 times normal daily volume--were traded after the company said its fourth-quarter profit will likely fall below analysts’ estimates of $4.4 million to $5.2 million.

Tokos officials also announced that revenue for the quarter ending Dec. 31 will not likely meet analysts’ estimates of $47 million to $50 million.

Based on October’s sales performance, Davenport said that he expects the company to be “either flat or slightly up from the third quarter.” Third-quarter earnings were $2.5 million on revenue of $44.4 million.

Company officials and analysts, scrambling Tuesday to assess the short-term impact of the hefty sell-off, said that longstanding controversies surrounding devices and drugs that detect and stop premature labor have made the company particularly susceptible to wide swings in its stock price.

Tuesday’s announcement sparked at least one brokerage to lower its recommendation of Tokos stock from a buy to a hold.

“We have lowered it because of all the uncertainty,” said Craig Dickson, an analyst for Interstate/Johnson Lane Corp. in Charlotte, N.C.