Will Hospira (HSP) Earnings Surprise Estimates in Q1? - Analyst Blog
Hospira Inc. HSP is set to report first-quarter 2015 results on Apr 28 before the market opens. Hospira’s earnings track record has been pretty good – last quarter, the company delivered a positive earnings surprise of 29.27%. Hospira has posted a positive earnings surprise in each of the trailing four quarters with an average beat of 29.98%. Let's see how things are shaping up for this announcement.
Factors Likely to Affect Earnings
The Specialty Injectable Pharmaceuticals segment, the biggest contributor to Hospira’s revenues, is expected to continue to perform well. However, the Medication Management segment is still under pressure.
Hospira has a lucrative biosimilar pipeline, which is potentially worth multi-billion dollars. As per company sources, the worldwide biosimilars market is expected to be worth approximately $20 billion by 2020.
The company did not provide any guidance for 2015 considering that it is set to be acquired by Pfizer Inc. PFE. The deal is expected to close in the second half of 2015. The transaction is valued at approximately $17 billion or $90 per share.
Going forward, we believe that investor focus will remain on updates from the Pfizer transaction.
Earnings Whispers
Our proven model does not conclusively show that Hospira is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: Earnings ESP for Hospira is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 51 cents.
Zacks Rank: Hospira carries a Zacks Rank #3. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are a few health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Acorda Therapeutics, Inc. ACOR has an Earnings ESP of +133.33% and a Zacks Rank #3. The company is scheduled to release results on Apr 30.
The Earnings ESP for Actavis ACT is +1.04% and it carries a Zacks Rank #2. The company is scheduled to release results on May 11.
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