Hospira posts 4Q profit, but outlook disappoints

Hospira falls as 2013 income and revenue estimates fall short of Wall Street expectations

Associated Press

NEW YORK (AP) -- Hospira Inc. said Wednesday it turned a profit in the fourth quarter after taking a large loss a year ago, when it wrote down the value of two of its overseas divisions.

However, the drug and device maker's 2013 guidance fell short of Wall Street estimates, and Hospira shares lost $2.62, or 7.5 percent, to $32.33 in afternoon trading.

Hospira earned $5.3 million, or 3 cents per share, in the fourth quarter, compared with a loss of $214 million, or $1.30 per share. A year ago Hospira wrote down the value of its Asia-Pacific business by $171 million and its Europe, Middle East and Africa unit by $74 million. During the latest quarter the company took a series of smaller one-time charges, the largest of which were related to problems at a manufacturing facility in North Carolina. It reported a similar charge a year ago.

If one-time charges are excluded, the Lake Forest, Ill., company said its income totaled 55 cents per share in the latest quarter.

Revenue rose 8 percent to $1.1 billion as sales of injectable drugs like the sedative Precedex and the chemotherapy drug oxaliplatin increased.

Analysts were expecting income of 54 cents per share and $1.05 billion in revenue, according to FactSet.

Hospira said sales in the Americas rose 11 percent to $869.7 million during the fourth quarter, and sales in Europe, the Middle East and Africa grew 5 percent to $139.7 million. Asia-Pacific sales fell 5 percent to $89.5 million.

In April 2010, the Food and Drug Administration said manufacturing processes at a Hospira facility in Rocky Mount, N.C., did not comply with regulatory standards. The company has been trying to fix its problems since then. During the fourth quarter Hospira reported $44 million, or 20 cents per share, that were mostly connected to those problems. In the fourth quarter of 2011 it reported $39 million, or 15 cents per share, in similar charges.

CEO Michael Ball said during a conference call the FDA started a new review of the facility on Tuesday, and the inspection "could be extensive and lengthy."

In 2012 Hospira turned a profit of $44.2 million, or 27 cents per share. In 2011 the company lost $9.4 million, or 6 cents per share. Its revenue edged up 1 percent, to $4.09 billion from $4.06 billion.

The company expects an adjusted profit of $2.05 to $2.20 per share in 2013, and said revenue will grow 1 to 3 percent, which implies a total of $4.13 billion to $4.21 billion.

Analysts had forecast income of $2.31 per share on $4.23 billion in revenue, on average.

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