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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 companyâ€™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 SAâ€™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 Hospiraâ€™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.
â€œLooking ahead to 2010, that one-time boost from oxaliplatin will fade quickly as more players enter the market said Morningstar Inc. analyst Brian Laegeler. â€œAs of yet thereâ€™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.â€
In the nine months ended Sept. 30, Hospiraâ€™s capital expenditures were $118.7 million, compared with $126.9 million in the year-earlier period.
Analystsâ€™ estimates compiled on Yahoo Finance have a fourth-quarter consensus of 83 cents per diluted share. A year ago, Hospiraâ€™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. Hospiraâ€™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 Zackâ€™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.
Hospiraâ€™s stock closed Tuesday at $47.11, up 81 cents from Mondayâ€™s close.