) is all set to announce its third quarter 2012 results before
the market opens on November 7, 2012. The Zacks Consensus
Estimate for the third quarter of 2012 is 45 cents, reflecting an
estimated year-over-year decline of 31.17%. The slowdown in
production at Hospira's facility in Rocky Mountain, North
Carolina, is expected to continue impacting earnings.
Second Quarter Recap
Hospira's second quarter 2012 earnings (excluding special items)
of 51 cents per share beat the Zacks Consensus Estimate of 49
cents. However, earnings fell short of the year-ago figure by
Hospira's second quarter 2012 revenues were $1.0 billion,
surpassing the Zacks Consensus Estimate of $986 million. Revenues
were, however, 2.9% lower than the year-ago figure.
The Specialty Injectable Pharmaceuticals (SIP) segment is the
biggest contributor to Hospira's top line. Although second
quarter 2012 SIP sales declined 4.6% (down 1.7% at constant
currency) to $644.2 million from the year-ago period, we note
that the year-over-year comparisons were tough as Hospira's
generic version of
) Taxotere was approved in the US in March 2011.
Agreement of Estimate Revisions
Over the past thirty days, most analysts covering Hospira have
left their earnings estimates unchanged for the third quarter of
2012. Only two analysts have revised earnings estimates for the
third quarter of 2012, one in either direction. We believe that
most analysts have preferred to adopt a wait-and-watch approach
until Hospira unfurls its results on November 7 before revising
Earnings estimates for fiscal 2012 have been slashed by two
analysts over the last thirty days with no upward movement(s).
Similarly, two analysts have reduced their earnings estimates for
fiscal 2013 over the last thirty days with no upward movement(s).
Magnitude of Estimate Revisions
Given the lack of earnings estimate revisions, earnings estimates
for the third quarter of 2012 have gone down by a penny to 45
cents over the last 30 days. Earnings estimates for fiscal 2012
and fiscal 2013 have gone down by a penny each, over the last 30
days to $2.00 and $2.47 per share, respectively.
Hospira has surpassed earnings estimates in two of the last four
quarters, in addition to reporting in line earnings in the
remaining two quarters. On average, the earnings surprise was
We have a Neutral recommendation on Hospira. The stock carries a
Zacks #3 Rank (Hold rating) in the short run.
HOSPIRA INC (HSP): Free Stock Analysis Report
SANOFI-AVENTIS (SNY): Free Stock Analysis
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