Although we're still six days short of the (black) magic number, Friday the 7th has proved an unlucky day indeed for shareholders in medical-testing services provider Hooper Holmes (NYSE:HH). The company, which competes with LabOne (NASDAQ:LABS) and, to a lesser extent, with Motley Fool Stock Advisor recommendation LabCorp (NYSE:LH), slashed fiscal 2005 earnings guidance this morning. Gone are July's expectations of "10-15% growth in diluted earnings per share" and $0.19 in profits. In their place, the company now predicts total diluted EPS of just $0.07 to $0.09 this year.

Hooper's problems come in two main forms. First, its key "paramedical" examination business, Portamedic, has continued to decline. Second, its business of conducting evaluations of medical claims placed with insurers is experiencing lower-than-expected revenues. The company attributed this latter difficulty in part to New York State insurance regulators taking "detrimental actions" that have reduced insurers' demand for independent evaluations of medical claims in no-fault automobile accident-related insurance claims.

Combined, the deterioration in these two areas of Hooper's business is expected to cause $0.06 worth of the company's per-share profits shortfall. Adding financial injury to reputational insult, another $0.03 worth of reduced profits will come from the company paying severance costs to its departing CEO and CFO. The company didn't elaborate on where the remaining $0.01-$0.03 worth of profits shortfall will come from.

Prompted by this morning's bad news, I've gone back and reviewed the company's most recent 10-Q to see how all of this is playing out on Hooper's cash flow statement. The answer? Not so well. According to Hooper's most recent 10-Q filing with the SEC, year to date, the company has experienced a sharp reversal of last year's positive free cash flow, to which I referred when we last looked at this company in May. Over the first six months of this year, Hooper has posted negative free cash flow of $4.5 million.

So, to recap, what we have here is a company whose senior management has jumped ship, whose revenues are deteriorating, whose profits forecast has been more than halved, and whose free cash flow -- the sole redeeming point I found in Hooper's favor back in May -- has dried up. With all this going against it, the only wonder today is that Hooper's stock hasn't fallen more than the current 1.5%.

For past Foolishness on Hooper Holmes, read:

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Fool contributor Rich Smith owns no shares in any of the companies mentioned in this article.