Earnings Beat at Hospira - Analyst Blog
01 Maio 2013 - 9:10AM
Zacks
Hospira Inc.’s (HSP) first quarter 2013
adjusted earnings of 52 cents per share beat the Zacks Consensus
Estimate of 44 cents. Higher-than-expected revenues led to the
earnings beat. Moreover, earnings were above the year-ago figure by
10.6%. Including one-time items, the company suffered a loss of 46
cents per share as opposed to earnings of 24 cents a year-ago.
First quarter revenues increased 2.3% to $988.3 million, narrowly
beating the Zacks Consensus Estimate of $988 million.
Quarter in Detail
The Specialty Injectable Pharmaceuticals (SIP) business, the
biggest contributor to Hospira’s revenues, performed well in the
quarter with sales from the segment climbing 11.1% (up 11.4% at
constant currency) to $651.5 million.
Drugs such as Precedex performed well during the quarter. Segmental
results were also aided by the improved pricing of SIP drugs. The
SIP segment includes generic injectables as well as proprietary
specialty injectables.
The segment includes offerings such as the generic version of
Sanofi’s (SNY) cancer drug, Eloxatin. Under the
segment, Hospira also markets biosimilars such as Nivestim, a
biosimilar of Amgen’s (AMGN) Neupogen, in Europe
and Australia.
The Medication Management segment performed disappointingly during
the first quarter of 2013. Sales in the segment declined 10.7%
(down 10.6% at constant currency) to $228.8 million. The segment
has been going through a rough patch. In Feb 2013, the US Food and
Drug Administration (FDA) expanded the import ban on certain
Hospira products issued last year.
In Nov 2012, the FDA had issued a directive prohibiting Hospira
from importing Symbiq medication infusion pumps, manufactured at
its Costa Rica facility, into the US. The US regulatory body issued
a fresh directive in Feb 2013, preventing Hospira from importing
Plum, GemStar and LifeCare PCA infusion pumps, manufactured in
Costa Rica, into the US. Sales in the Other Pharma division
declined 12.4% (down 12.2% at constant currency) to $108.0
million.
Geographically, the Americas, Europe, Middle East and Africa and
the Asia-Pacific markets contributed $786.8 million (up 2.4% at
constant currency), $130.3 million (up 1.2% at constant currency)
and $71.2 million (up 6.5% at constant currency), respectively, to
total revenue in the first quarter of 2013.
2013 Outlook
Apart from releasing its financial results, the company issued a
fresh guidance for 2013. We remind investors that Hospira withdrew
its guidance for 2013 (issued while releasing the fourth quarter
2012 results) following the FDA decision in Feb 2013 to expand the
import ban on some of Hospira’s products.
Hospira now expects top-line growth in the range of negative 1% to
positive 1%. The company expects 2013 adjusted earnings in the
range of $2.05 to $2.10 per share, representing flat to 5% growth.
The Zacks Consensus Estimate currently stands at $2.04 per share,
just below the company’s guidance range.
The company expects cash flow from operations for 2013 in the range
of $200 million - $250 million. Depreciation and amortization is
projected in the range of $255 million- $275 million. Hospira
forecasts 2013 capital expenditures in the range of $425 million -
$475 million.
Global Device Scheme Unfurled
In a separate development, Hospira unveiled a strategy to modernize
and streamline its device portfolio in order to drive growth and
serve customers in a better manner. Under the program the company
intends to remove its relatively old pump technology from the
market and bring in customer replacement programs over the next few
years.
Moreover, Hospira intends to focus on developing next-generation
pump technology. The company will focus on strengthening its global
device quality system to facilitate growth.
Hospira carries a Zacks Rank #4 (Sell). Not all stocks in the
medical sector are performing as poorly as Hospira.
NuVasive, Inc. (NUVA) is an example of an
attractive stock in the sector and carries a Zacks Rank #2
(Buy).
AMGEN INC (AMGN): Free Stock Analysis Report
HOSPIRA INC (HSP): Free Stock Analysis Report
NUVASIVE INC (NUVA): Free Stock Analysis Report
SANOFI-AVENTIS (SNY): Free Stock Analysis Report
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