Hospira Announces Projections for 2005
31 Janeiro 2005 - 10:31AM
PR Newswire (US)
Hospira Announces Projections for 2005 LAKE FOREST, Ill., Jan. 31
/PRNewswire-FirstCall/ -- Hospira, Inc. (NYSE:HSP), one of the
largest hospital products manufacturers in the United States, today
announced its annual projections for 2005. Hospira projects that
revenue for the fiscal year 2005 will be approximately $2.5
billion. Diluted earnings per share are projected to be in the
range of $1.30 to $1.37, including estimated non-recurring
transition expenses described below. Adjusted* annual diluted
earnings per share for 2005, which exclude the non-recurring
transition expenses, are projected to be in the range of $1.53 to
$1.60. The earnings per share projection on both a Generally
Accepted Accounting Principles (GAAP) and adjusted basis also do
not include any effect of the accounting standards recently issued
by the Financial Accounting Standards Board (FASB) related to
expensing stock options or the effect of any future decision to
repatriate foreign earnings under the Jobs Creation Act of 2004.
"We are very much on course with what we initially charted for the
company in our 24-month transition period as we separate from
Abbott Laboratories," said Christopher B. Begley, chief executive
officer, Hospira. "We remain focused on our two priorities during
the transition -- building our independent infrastructure as a
public company and increasing our research and development
investments -- both of which provide Hospira with a strong
foundation for future growth." Non-recurring transition expenses
related to building Hospira's infrastructure are projected in 2005
to be $44 million to $52 million on a pre-tax basis, or $0.21 to
$0.25 per diluted share on an after-tax basis. Hospira expects to
incur non-recurring transition costs, which include building
Hospira's information technology infrastructure, the re-registering
and re-labeling of products, and other one-time activities related
to the spin-off, through the first half of 2006. A reconciliation
between the adjusted* and GAAP projections for 2005 diluted
earnings per share, excluding any effect of expensing options or
the effect of any future decision to repatriate foreign earnings,
are as follows: Diluted earnings per share -- adjusted* $1.53 -
$1.60 Non-recurring transition expenses related to becoming an
independent, stand-alone company (mid-point of an estimated $0.21
to $0.25 per diluted share range for 2005) ($0.23) Diluted earnings
per share -- GAAP basis $1.30 - $1.37 Additional information on
selected income statement items is outlined in the table below.
Income Statement 2005 Projections on Comments on Factors Item an
Adjusted* Basis Affecting 2005 Results Sales Approximately -- The
"wind-down" and $2.5 billion termination of the contract to
distribute Berlex imaging agents is projected to result in a
reduction in sales of $130 million to $140 million. -- Full-year
impact of exclusion of value of bulk drug component of certain
products in Hospira's sales to Abbott vs. eight months in 2004. --
Elimination of low-margin contracts in contract manufacturing
product line is estimated to have a negative impact of $15 million
to $20 million in the second half of 2005. Gross Margin
Approximately -- Hospira will recognize 31.2% to 31.7% a margin on
sales to Abbott for a full year vs. eight months in 2004. --
"Wind-down" and termination of Berlex contract is currently
projected to reduce gross profit by $8 million to $9 million, but
is projected to improve gross margin by more than 100 basis points.
Research & Approximately -- An increase is planned Development
5.0% to 5.5% over 2004, as R&D is a of sales primary element of
Hospira's strategy to invest for growth. S,G&A Approximately --
Inclusion of a full year 11.8% to 12.3% of ongoing, incremental of
sales spending associated with being an independent, public company
-- Increase in expenses for international infrastructure Interest
Expense Approximately -- Inclusion of interest $30 million expense
for the full year Tax Rate 24.0% -- Higher proportion of income
from low tax rate jurisdictions Assumed Shares Approximately --
Increase due to shares Outstanding 159.5 million issued upon the
exercise For Diluted of stock options EPS Calculation In addition,
the company estimates that cash flow from operations will be in the
$400 million to $450 million range in 2005. Depreciation and
amortization for 2005 is currently projected to be in the $150
million to $160 million range. Capital expenditures for 2005 are
projected to be in the $250 million to $275 million range. 2004
Financial Results Hospira will release its 2004 fourth-quarter and
full-year financial results on Wednesday, March 2, 2005, before the
U.S. stock market opens. The company will not be providing any
updates to its previous projections announced on Nov. 9, 2004,
prior to the March 2 release date. *Use of Non-GAAP Financial
Measures In addition to the results projected in accordance with
GAAP in the United States included within this press release,
Hospira has provided certain information that is considered
non-GAAP financial measures. As used in this press release,
"adjusted" refers to projections of operating performance measures
that exclude the non-recurring transition expenses related to
becoming an independent, stand-alone public company for 2005. The
adjusted earnings per share projection was reconciled to its
closest GAAP measure in accordance with Securities and Exchange
Commission Rules, excluding any effect of expensing options or the
effect of any future decision to repatriate foreign earnings.
Management believes that these non-GAAP financial measures are
useful to both management and Hospira's investors in their analysis
of the company's ongoing business and operating performance.
Management also uses this information for operational planning and
decision-making purposes. Non-GAAP financial measures should not be
considered a substitute for any GAAP measure. Additionally,
non-GAAP financial measures as presented by Hospira may not be
comparable to similarly titled measures reported by other
companies. Webcast A conference call for investors will be held at
9 a.m. Central Time, Monday, Jan. 31, 2005. A live webcast of the
conference call will be available online in the investor relations
section of Hospira's Web site, http://www.hospira.com/ , or through
Thomson's individual investor center at
http://www.companyboardroom.com/ . Listeners should log on
approximately 10 minutes in advance to ensure proper computer setup
to receive the webcast. A replay will be available on the Hospira
Web site for 30 days following the call. About Hospira Hospira,
Inc. is a global specialty pharmaceutical and medication delivery
company dedicated to Advancing Wellness(TM) by developing,
manufacturing and marketing products that help improve the safety
and efficacy of patient care. Created from the core global hospital
products business of Abbott Laboratories, Hospira is a new company
with 70 years of service to the hospital industry. The company's
portfolio includes one of the industry's broadest lines of generic
acute-care injectables, which help address the high cost of
proprietary pharmaceuticals in hospitals; integrated solutions for
medication management and infusion therapy; and the leading U.S.
injectable contract manufacturing business. Headquartered in Lake
Forest, Ill., north of Chicago, Hospira has more than 14,000
employees and 15 manufacturing facilities worldwide. Hospira's news
releases and other information can be found at
http://www.hospira.com/ . Private Securities Litigation Reform Act
of 1995 -- A Caution Concerning Forward-Looking Statements Some
statements in this news release may be forward-looking statements
for purposes of the Private Securities Litigation Reform Act of
1995. Hospira cautions that these forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially from those indicated in the forward-looking
statements. Economic, competitive, governmental, technological and
other factors that may affect Hospira's operations and may cause
actual results to be materially different from expectations include
the risks and uncertainties set forth in the information statement
under the heading "Risk Factors" in the most recent version of the
Form 10 filed with the Securities and Exchange Commission, which
are incorporated by reference. Hospira undertakes no obligation to
release publicly any revisions to forward-looking statements as the
result of subsequent events or developments.
http://www.newscom.com/cgi-bin/prnh/20040503/HSPLOGO
http://photoarchive.ap.org/ DATASOURCE: Hospira, Inc. CONTACT:
Media, Shannon Gore, +1-224-212-2003, or Stacey Eisen,
+1-224-212-2276, or Financial Community, Lynn McHugh,
+1-224-212-2363, all of Hospira, Inc. Web site:
http://www.hospira.com/
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