Hospira, Inc. (Hospira), a US based medical devices company, reported net sales of $3.6 billion for the full year of 2008, up 5.6%, compared with the net sales of $3.4 billion in the previous year-end. It has also reported a net income of $320.9 million, or $1.99 per diluted share, for the full year of 2008, compared with the net income of $136.8 million, or $0.85 per diluted share, in the previous year-end.
For the fourth quarter of 2008, net sales were $914 million, and adjusted diluted earnings per share were $0.78. For the full year of 2008, net sales were $3.6 billion, and adjusted diluted earnings per share were $2.53.
“Hospira delivered another positive year of performance in 2008, generating solid revenue and strong profit growth, further advancing key areas of our business and successfully completing the integration of the Mayne Pharma acquisition,” said Christopher B. Begley, chairman and chief executive officer. “Looking forward, as a diversified healthcare company primarily serving the acute-care market, Hospira is well positioned in 2009. Hospira’s underlying businesses remain solid, and we expect another year of growth guided by our focus on execution and operational optimization.”
Fourth-Quarter 2008 Results
Net sales decreased 3.4% to $914 million in the fourth quarter of 2008, compared to $946 million in the fourth quarter of 2007. The decline was primarily driven by three factors: unfavorable foreign currency translation; unusually high US wholesaler purchasing patterns for Specialty Injectable Pharmaceuticals in the fourth quarter of 2007; and decreased demand in Other Pharma from some contract manufacturing customers.
Medication Management Systems (MMS) reported solid sales growth based on continued demand for its newest general infusion system, Symbiq.
Adjusted operating income increased 22.5% to $188 million in the fourth quarter of 2008, compared to $154 million in the fourth quarter of 2007. Contributing to the increase was favorable volume/mix, improved manufacturing efficiency and the impact of Selling, General & Administrative (SG&A) cost-containment measures.
Full-Year 2008 Results
Net sales increased 5.6% to $3.6 billion for the year ended Dec. 31, 2008, compared to $3.4 billion for the prior year. The increase was primarily a result of the impact of new group purchasing organization (GPO) awards; strong demand for the company’s MMS product lines; and favorable foreign currency translation.
Adjusted operating income increased 11.6% to $647 million for the full year of 2008, compared to $580 million for the full year of 2007. The increase is primarily a result of favorable volume/mix, improved manufacturing efficiencies and the impact of foreign exchange.
Cash flow from operations for the full-year 2008 was $584 million, an increase compared to the $551 million generated in 2007.
Capital expenditures were $164 million for the full year, compared to $211 million in 2007. The decline is partly due to lower spending in 2008 than in 2007 related to the company’s facilities optimization initiatives, as well as to capital-spending controls the company effected in the second half of 2008.
Hospira expects net sales growth for full-year 2009 to be approximately 4 to 6% on a constant-currency basis. Including the impact of foreign exchange, the company expects net sales to be relatively flat. Adjusted diluted earnings per share for 2009 are expected to be in the range of $2.62 to $2.72.
The company projects that cash flow from operations in 2009 will be in the $565 million to $615 million range. Depreciation and amortization is expected to be between $210 million and $220 million. Capital expenditures are projected to be between $155 million and $175 million.
“Our 2009 guidance aligns with our core strategies to improve margins and cash flow and invest for growth,” said Begley. “We have a robust global generic drug pipeline and attractive growth opportunities in generic injectables. With our expanded GPO contracts, we expect to attract additional customers to our broad portfolio of products. We also expect continued momentum with MMS as we advance our technologically enhanced offerings. Through our streamlined, focused management and optimization initiatives, we are well positioned to advance our growth opportunities and drive sustainable long-term growth.”