HSP

Hospira, Inc. (HSP) recently announced that its Symbiq 3.13 infusion pump has been cleared by the US Food and Drug Administration (FDA). The device, an improved version of the advanced infusion system platform at Hospira, is one of the first to be cleared via the new draft regulatory guidance for 510(k) infusion pump submissions of the US regulatory body.

The device, which boasts of an updated software design and other superior technological features, should improve efficiency thereby reducing medical errors. Hospira intends to make its new offering available to previously contracted customers in the second quarter of 2012.

Management at Hospira stated that the FDA clearance of the technologically advanced infusion pump will not impact the 2012 projection provided while releasing the fourth-quarter and full year 2011 results last month.

Hospira, based in Lake Forest, Illinois, had stated that it expects top-line growth in the range of -1% to 2% on a constant currency basis. Foreign exchange is expected to have a negative impact of 1% on the top line. The company expects adjusted earnings in the range of $2.00–$2.30, as opposed to $3.04 per share earned in 2011.

The decline is attributable to the ongoing quality control issues at the company. The company said that it will increase investment in research and development to expand its product portfolio. This will also impact the bottom line.

Our Recommendation

We currently have a Neutral recommendation on Hospira. The stock carries a Zacks #3 Rank (Hold rating) in the short-run.

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