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Hospira Inc. saw a 42 percent third-quarter profit increase mainly due to the launch of oxaliplatin, an injectable chemotherapy drug, as well as restructuring and cost cuts.
The company’s profit rose to $116.2 million, or 71 cents per diluted share, in the quarter ended Sept. 30, up from $81.8 million, or 51 cents per diluted share, in the year-earlier period. Analysts polled by Yahoo Finance had a consensus estimate of 69 cents per diluted share.
Sales at the Lake Forest specialty pharmaceutical and medication delivery company increased to $1.01 billion from $925.5 million, an increase of 9 percent.
Oxaliplatin was launched by Hospira in the U.S. in August and is a generic version of Sanofi-Aventis SA’s Eloxatin, an injectable colon cancer drug that had $1.4 billion in sales in 2008. Increased sales volume of Precedex, a sedation drug, also helped Hospira’s profits, as well as the introduction of other products.
In March, Hospira announced a two-year restructuring and cost-cutting plan that includes the closing of manufacturing plants and laying off about 10 percent of its global workforce. Hospira said it expects restructuring costs between $140 million to $160 million during that period.
Hospira closed three manufacturing plants between 2007 and March 2009 and is in the process of closing a fourth plant in Morgan Hill, Calif. For the quarter ended Sept. 30, restructuring costs were $13.8 million compared with $4.5 million in the year earlier quarter.
“Looking ahead to 2010, that one-time boost from oxaliplatin will fade quickly as more players enter the market said Morningstar Inc. analyst Brian Laegeler. “As of yet there’s no change in hospital cap ex spending, given the uncertainty of the economic recovery right now, so those factors will weigh against growth in 2010.”
In the nine months ended Sept. 30, Hospira’s capital expenditures were $118.7 million, compared with $126.9 million in the year-earlier period.
Analysts’ estimates compiled on Yahoo Finance have a fourth-quarter consensus of 83 cents per diluted share. A year ago, Hospira’s earnings were 78 cents per diluted share.
The company did not provide fourth-quarter guidance but said it expects to earn between $2.25 per diluted share and $2.30 per diluted share for the full year. Hospira’s earnings guidance at the end of the second quarter was between $2.10 per diluted share and $2.15 per diluted share.
On an adjusted basis, the company expects to earn between $2.85 per diluted share and $2.90 per diluted share this year. Analysts polled by by Zack’s Investment Research have a full-year consensus of $2.84 per diluted share.
In the nine-month period ended Sept. 30, Hospira earned $307.2 million, or $1.89 per diluted share, compared with $216.3 million, or $1.34 per diluted share, in the year-earlier period. Sales rose 4 percent to $2.82 billion from $2.72 billion.
Hospira’s stock closed Tuesday at $47.11, up 81 cents from Monday’s close.