Orange, Calif. Citing the impact of the prospective payment system on PharMerica, its long-term-care subsidiary acquired in April, Bergen Brunswig Corp. said it expects disappointing third-quarter earnings.

The company estimated earnings of 25 cents to 27 cents a share for the quarter ended June 30 and $1.10 to $1.15 a share for the year. Analysts were expecting 31 cents a share for the quarter and $1.24 a share for the year. Final results had not been released at press time in mid-July.

Donald Roden, president and chief executive officer, said the company took into consideration the impact of PPS "and made what we thought were very significant downward revisions to revenue and profit growth in our internal models to account for these concerns." However, he said, "the impact of PPS has been greater than we or the industry expected."

To address the earnings weakness, Bergen Brunswig is taking steps to reduce costs by more than $20 million, Roden said. That will be achieved through such moves as consolidating billing centers, centralizing package operations and streamlining product delivery, he said. -K.G., S.H.