Hospira Beats by a Penny, Backs View - Analyst Blog

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Hospira Inc. 's ( HSP ) first quarter 2012 earnings (excluding special items) of 47 cents per share edged past the Zacks Consensus Estimate of 46 cents. However, earnings fell short of the year-ago figure by 49.5%.

Earnings during the quarter were hurt by lower revenues and higher costs. On a reported basis (including special items), the company earned 24 cents per share, down 72.7%.

The Lake Forest, Illinois-based company came up with revenues of $966 million in the reported quarter, comfortably beating the Zacks Consensus Estimate of $951 million. Revenues were, however, 3.6% lower than the year-ago figure of $1.0 billion. Earnings continued to be impacted by the slowdown in production at the company's facility in Rocky Mountain, North Carolina.


Quarter in Detail

The Specialty Injectable Pharmaceuticals (SIP) business, the biggest contributor to Hospira's revenues, performed disappointingly in the quarter with sales from the segment declining 8.2% to $586.4 million. This segment includes generic injectables as well as proprietary specialty injectables. The SIP unit includes drugs such as the generic version of Sanofi 's ( SNY ) oncology therapy Taxotere.

Sales in the Medication Management ( MMS ) segment climbed 6.7% to $256.2 million. Sales in the Other Pharma division were flat at $123.3 million.

Geographically, the Americas, Europe, Middle East and Africa (EMEA) and the Asia-Pacific (APAC) markets contributed $770.3 million (down 4.8%), $127.9 million (up 6.6%) and $67.7 million (down 7.8%), respectively, to total revenues in the reported quarter.

2012 Outlook

Apart from announcing financial results, Hospira reaffirmed its guidance for 2012. The company continues to expect top-line growth in the range of -1% to 2% on a constant currency basis. Foreign exchange is expected to negatively impact the top line by 1%.

The company expects adjusted earnings in the range of $2.00-$2.30 per share. The Zacks Consensus Estimate of $2.17 is well within the company's guidance range.

Hospira expects cash flow from operations in the range of $575 -$625 million in 2012.  Capital expenditures are expected in the range of $350 -$400 million. Depreciation and amortization is expected in the range of $240-$260 million.

Our Recommendation

We currently 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 Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: HSP , MMS , SNY

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