Drugs and medical device maker Hospira, Inc. (HSP) said Thursday that its fourth quarter profit fell 8% from last year, as higher operating costs and expenses more than offset a 15.5% increase in revenue. However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations. At the same time, the company forecast full year 2010 earnings in line with analysts' current consensus estimate.
The company reported net income for the fourth quarter of $96.7 million or $0.58 per share, compared to $104.6 million or $0.65 per share for the year-ago quarter.
Excluding items, adjusted net income for the fourth quarter was $144.6 million or $0.87 per share, compared to $126.3 million or $0.78 per share in the prior year quarter.
On average, 9 analysts polled by Thomson Reuters expected the company to earn $0.69 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Total operating costs and expenses for the quarter jumped 21% to $919.6 million from $758.0 million a year ago.
Income from operations for the fourth quarter declined 12.9% to $135.6 million from $155.7 million in the fourth quarter of last year.
Adjusted income from operations for the fourth quarter increased 8.5% to $204 million from $188 million last year, driven mainly by higher sales, more favorable product mix and improvements resulting from the company's Project Fuel optimization initiatives.
Net sales for the fourth quarter rose 15.5% to $1.06 billion from $913.7 million in the same quarter last year, driven mainly by an increase in specialty injectable drugs, mainly due to the third quarter launch of the generic chemotherapy agent oxaliplatin in solution form in the U.S. and strength in the company's proprietary sedation agent, Precedex. Seven analysts had a consensus revenue estimate of $963.45 million for the fourth quarter.
For the fourth quarter, sales of specialty injectable drugs rose 25.6% year-over-year to $578.3 million and sales of other drugs increased 8% to $197.2 million. Medical device sales grew 3% to $279.7 million.
"Driven by double-digit revenue and adjusted earnings growth, the fourth quarter concluded a year of transformation for Hospira. In addition to our strong financial performance, we made significant progress on many fronts, including augmenting our biogenerics program, launching a generic version of a blockbuster oncology drug, and advancing Project Fuel, our corporate-wide optimization initiative," said Christopher Begley, Hospira chairman and chief executive officer.
For the full year 2009, the company reported net income of $403.9 million or $2.47 per share, compared to $320.9 million or $1.99 per share for the full year 2008.
Adjusted net income for the full year 2009 was $507.0 million or $3.11 per share, compared to $408.1 million or $2.53 per share in 2008.
Net sales for the full year 2009 increased 6.9% to $3.88 billion from $3.63 billion the prior year.
Looking forward, the company said it expects full year 2010 net sales to grow 6% to 8% on a constant-currency basis, excluding the projected year-over-year impact of oxaliplatin sales and business disposals. Including the impact of these items and foreign exchange, the company expects net sales to be flat to slightly up.
The company also forecast earnings of $2.66 to $2.76 per share and adjusted earnings of $3.25 to $3.35 per share.
Analysts currently expect the company to earn $3.30 per share on revenue of $3.95 billion for the full year 2010.
Hospira shares are currently trading at $50.48, down $1.33 or 2.57%. The shares are trading in a 52-week range of $21.21 to $52.79.
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