Tough Quarter for Hospira - Analyst Blog
26 Outubro 2011 - 1:30PM
Zacks
Hospira Inc.’s (HSP) third quarter 2011 adjusted
earnings of 66 cents per share fell short of the year-ago adjusted
earnings by 8 cents. Earnings were in line with the Zacks Consensus
Estimate. Earnings were hurt by the slowdown in production at the
company’s facility in Rocky Mountain, North Carolina.
The Lake Forest, Illinois based company came up with revenues of
$976.7 million in the reported quarter, missing the Zacks Consensus
Estimate by $19.3 million. Revenues were however 2.9% higher than
the year ago figure of $949.3 million. The year-over-year
improvement was driven by driven by strong US sales of the generic
version of
Sanofi Aventis’ (SNY) cancer drug
Taxotere (docetaxel).
Quarter in Detail
The Specialty Injectable Pharmaceuticals (SIP) business performed
well in the quarter with sales from the segment climbing 12.2% to
$626.8 million. The Medication Management (MMS) segment was weak
during the quarter with sales plummeting 4.8% to $240.6 million.
Sales in the Other Pharma division declined 20.7% to $109.3 million
in the third quarter of 2011.
Geographically, the Americas, Europe, Middle East and Africa (EMEA)
and the Asia-Pacific (APAC) markets contributed $767.9 million (up
0.8%), $129.3 million (up 11.3%) and $79.5 million (up 12.0%)
respectively to total revenues during the reported quarter.
2011 Guidance
Apart from reporting disappointing third quarter numbers, Hospira
reaffirmed its 2011 adjusted earnings guidance to $2.95-$3.05
provided while releasing preliminary third quarter results last
week. The Zacks Consensus Estimate for 2011, revised downwards
following the release of the preliminary third quarter results,
currently stands at $3.01.
Hospira expects cash flow from operations in the range of $350
million-$400 million in 2011. Capital expenditures are
expected in the range of $325 million-$350 million. Depreciation
and amortization is expected in the range of $230 million-$250
million.
Our Take & Recommendation
The below-par third quarter results does surprise us since we had
got a taste of things to come through the disappointing third
quarter preliminary results released last week. (Please read our
detailed coverage of the preliminary third quarter results at
Hospira Trims Outlook).
We had downgraded our long-term recommendation on Hospira to
Underperform from Neutral following the disappointing third quarter
preliminary results released by the company. The weak third quarter
showing fully justifies our decision. The shares of Hospira carry a
Zacks #5 Rank (Strong Sell) in the short-run.
HOSPIRA INC (HSP): Free Stock Analysis Report
SANOFI-AVENTIS (SNY): Free Stock Analysis Report
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