LAKE FOREST, Ill., Oct. 27 Hospira, Inc. (NYSE: HSP), a leading global specialty pharmaceutical and medication delivery company, today reported results for the third quarter ended Sept. 30, 2009. Net sales for the quarter were $1.0 billion, and adjusted* diluted earnings per share were $0.90. (Adjusted* measures exclude certain specified items as described later in this press release and the attached schedules.)
"Hospira delivered strong results in the third quarter, aided by the launch of the generic oncolytic oxaliplatin and additional progress toward our Project Fuel initiatives," said Christopher B. Begley, chairman and chief executive officer. "We continued to position Hospira for future success in this milestone quarter, during which we surpassed the billion dollar revenue mark for the first time and generated strong double-digit earnings per share growth. We remain confident in our projections for full-year sales and are increasing our earnings per share guidance."
Third-Quarter 2009 Results
The following table highlights selected financial results for the third quarter of 2009 compared to the same period in 2008:
Results under U.S. Generally Accepted Accounting Principles (GAAP) include items detailed in the schedules attached to this press release.
Net sales increased 8.9 percent to $1.0 billion in the third quarter of 2009, compared to $926 million in the third quarter of 2008. The growth was driven by an increase in Specialty Injectable Pharmaceuticals, primarily a result of the third-quarter launch of oxaliplatin in solution form in the United States.
Adjusted* income from operations increased 28.3 percent to $207 million in the third quarter of 2009, compared to $162 million in the third quarter of 2008. Driving the majority of the increase were higher sales volumes and increased manufacturing efficiency. Partially offsetting these factors was the impact of certain product recall-related costs as well as the impact of foreign exchange.
Cash flow from operations for the first nine months of 2009 was $541 million, compared to $329 million generated for the same period in 2008.
Capital expenditures decreased to $119 million for the first nine months of 2009, compared to $127 million for the same period in 2008, due to the impact of the company's tighter capital-spending controls implemented in the second half of 2008.
Hospira continues to expect net sales for the year to increase approximately 5 to 7 percent on a constant-currency basis. Including the impact of foreign exchange, the company expects net sales to be slightly up.
During the third quarter, Hospira recognized an income tax benefit on the expiration of statutes of limitation on certain unrecognized tax benefits. The tax benefit was partially offset by the tax effect of the U.S. launch of oxaliplatin. Based on these factors, the company is adjusting the guidance for its 2009 effective tax rate to 20 to 21 percent from the prior guidance of 21 to 22 percent.
As a result, the company now expects full-year 2009 adjusted* diluted earnings per share to be between $2.85 and $2.90 per share. The reconciliation between the projected 2009 adjusted* diluted earnings per share and GAAP diluted earnings per share follows:
The company now projects that cash flow from operations in 2009 will be in the $700 million to $750 million range. Depreciation and amortization is now expected to be between $225 million and $235 million. Capital expenditures are projected to be between $155 million and $175 million.
*Use of Non-GAAP Adjusted Financial Measures
Non-GAAP financial measures used in this press release are reconciled to the most comparable measures calculated in accordance with GAAP in the schedules attached to this release.
Hospira will hold a conference call for investors and media at 8 a.m. Central time on Tuesday, Oct. 27, 2009. A live webcast of the conference call will be available on Hospira's Web site at www.hospirainvestor.com. Listeners should log on approximately 10 minutes in advance to ensure proper setup for receiving the webcast. A replay will be available on the Hospira Web site for 30 days following the call.
Hospira, Inc. is a global specialty pharmaceutical and medication delivery company dedicated to Advancing Wellness(TM). As the world leader in specialty generic injectable pharmaceuticals, Hospira offers one of the broadest portfolios of generic acute-care and oncology injectables, as well as integrated infusion therapy and medication management solutions. Through its products, Hospira helps improve the safety, cost and productivity of patient care. The company is headquartered in Lake Forest, Ill., and has approximately 14,000 employees. Learn more at www.hospira.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including projections of certain measures of Hospira's results of operations, projections of certain charges and expenses, and other statements regarding Hospira's goals and strategy. Hospira cautions that these forward-looking statements are subject to risks, uncertainties and assumptions, many of which are beyond Hospira's control, that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological and other factors that may affect Hospira's operations and may cause actual results to be materially different from expectations include the risks, uncertainties and factors discussed under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Hospira's latest Annual Report on Form 10-K and subsequent Form 10-Qs, filed with the Securities and Exchange Commission, which are incorporated by reference. Hospira undertakes no obligation to release publicly any revisions to forward-looking statements as the result of subsequent events or developments.
In $ millions, GAAP Adjusted* except per Three Months Ended Three Months Ended share amounts September 30, September 30, ---------------- % ---------------- % 2009 2008 Change 2009 2008 Change -------- ------ ------ ------ ------ ------ Net Sales $1,007.5 $925.5 8.9% n/a n/a n/a Gross Profit (Net Sales less Cost of Products Sold) $395.6 $333.8 18.5% $418.4 $355.5 17.7% Income from Operations $161.5 $132.7 21.7% $207.2 $161.5 28.3% Diluted EPS $0.71 $0.51 39.2% $0.90 $0.63 42.9% Statistics (as a % of Net Sales) ------------------------------- Gross Profit (Net Sales less Cost of Products Sold) 39.3% 36.1% 41.5% 38.4% Income from Operations 16.0% 14.3% 20.6% 17.5%
SOURCE Hospira, Inc.