Hospira Trims Outlook - Analyst Blog
19 Outubro 2011 - 2:30PM
Zacks
Hospira Inc.’s (HSP) third quarter 2011
adjusted preliminary earnings of $0.66 per share were in line with
the Zacks Consensus Estimate. The projected adjusted earnings for
the third quarter, for which detailed results will be announced on
October 26, 2011, before the start of trading, were shy of
the year ago adjusted earnings by $0.08.
The weak preliminary earnings for the third quarter were
attributable to the slowdown in production at the company’s
facility in Rocky Mountain, North Carolina.
Preliminary third quarter revenues climbed 2.9% to $977 million
driven by strong US sales of the generic version of Sanofi
Aventis’ (SNY) cancer drug Taxotere (docetaxel).
Preliminary revenues, however, fell short of the Zacks Consensus
Estimate of $1,052 million.
Apart from reporting disappointing preliminary third quarter
numbers, Hospira also trimmed its projection for 2011. The Lake
Forest, Illinois based company reduced its 2011 adjusted earnings
guidance to $2.95-$3.05.
The facility at Rocky Mountain is expected to function below
full capacity throughout the remainder of 2011. The Zacks Consensus
Estimate for 2011 of $3.00 per share is within the revised guidance
range provided by the company.
We note that issues pertaining to the facility at Rocky
Mountain, North Carolina have been troubling Hospira, a global
specialty pharmaceutical and medication delivery company, for quite
sometime.
In April 2010, Hospira had received a warning letter from the US
Food and Drug Administration (FDA) expressing concerns regarding
the manufacturing facility at North Carolina. Though the company is
aggressively working to address their concerns, production at the
site has not reached normal levels thereby hampering performance
leading to the weak forecast.
Our Recommendation
The shares of Hospira carry a Zacks #4 Rank (Sell) in the
short-run highlighting near-term pressure on the stock. We are
concerned about the manufacturing issues confronting Hospira. We
have a Neutral recommendation on the stock in the long-run.
HOSPIRA INC (HSP): Free Stock Analysis Report
SANOFI-AVENTIS (SNY): Free Stock Analysis Report
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