The Associated Press

COLUMBUS - Cardinal Health Inc. faces two more problems, with a law firm filing a class-action lawsuit against it and a major credit-rating agency putting the company's long-term debt rating under review.

Pennsylvania law firm Schiffrin & Barroway is suing Cardinal as well as Robert D. Walter, its chairman and chief executive officer, and Richard J. Miller, the company's chief financial officer. The lawsuit was filed Friday in federal court in Columbus.

The suit alleges Cardinal and its officers violated securities law by manipulating accounting practices, and that Cardinal's earnings were inflated.

Cardinal spokesman Jim Mazzola said the company does not comment on litigation.

In addition, Moody's Investors Service put Cardinal's long-term debt rating under review for a possible downgrade. A lower rating could result in higher borrowing costs for Cardinal.

Moody's concern was focused mostly on Cardinal's announcement Wednesday that its earnings will be lower than expected.

"If Cardinal is not able to reverse negative trends in its drug-distribution area, there is a possibility that net income will be affected to an even greater extent than expected" next year, analyst Diana Lee said.

Cardinal last week lowered its estimates for fourth-quarter earnings and growth for fiscal year 2005. The company, which provides medical services and products, also said it received a subpoena from federal regulators investigating its accounting practices.

On Thursday, stock prices tumbled almost 25 percent, then fell another 2.1 percent on Friday to close at $51.76, the stock's lowest level in nearly two years.

Cardinal, based in the Columbus suburb of Dublin, is Ohio's largest company with annual sales of $56.7 billion.