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Hospira Inc.’s (HSP - Analyst Report) fourth quarter 2012 earnings (excluding special items) of 55 cents per share beat the Zacks Consensus Estimate of 54 cents. Higher-than-expected revenues led to the earnings beat. Moreover, earnings were above the year-ago figure by 7.8%. Including one-time items, fourth quarter 2012 earnings came in at 3 cents per share as opposed to a loss of $1.30 suffered in the final quarter of 2011.

Fourth quarter revenues increased 8.4% to $1.1 billion, narrowly beating the Zacks Consensus Estimate of $1.04 billion.

Full year adjusted earnings came in at $2.01 per share, a penny above the Zacks Consensus Estimate but 33.9% below the year-ago earnings. Results were hurt by the manufacturing challenges at the company’s facility in Rocky Mountain, North Carolina. Full year earnings came in a penny above the company’s guidance. Revenues increased 0.9% to $4.1 billion in 2012, edging past the Zacks Consensus Estimate of $4.04 billion.

Quarter in Details

The SIP business, the biggest contributor to Hospira’s revenues, performed well in the quarter with sales from the segment climbing 11.9% (up 12.1% at constant currency) to $696.2 million.

Drugs such as Precedex performed well during the quarter. Moreover, the Aug 2012 re-launch of Hospira’s generic version of Sanofi’s (SNY - Analyst Report) cancer drug, Eloxatin, also aided results. The SIP segment includes generic injectables as well as proprietary specialty injectables.

Sales in the Medication Management segment climbed 3.3% (up 3.2% at constant currency) to $268.6 million. Sales in the Other Pharma division climbed 1.5% (up 1.5% at constant currency) to $134.1 million.

Geographically, the Americas, Europe, Middle East and Africa and the Asia-Pacific markets contributed $869.7 million (up 10.3% at constant currency), $139.7 million (up 7.0% at constant currency) and $89.5 million (down 5.2% at constant currency), respectively, to total revenue in the final quarter of 2012.

2013 Outlook

Apart from releasing its financial results, the company provided guidance for 2013. Hospira expects top-line growth in the range of 1%-3% both on constant-currency and reported basis. The company expects 2013 adjusted earnings in the range of $2.05 to $2.20 per share, up 2%-9%. The Zacks Consensus Estimate for 2013 is at the high end of the guidance range.

Hospira carries a Zacks Rank #3 (Hold). Favorably placed stocks in the medical sector include Covidien plc (COV - Analyst Report) and Edwards Lifesciences Corporation (EW - Analyst Report). Both stocks sport a Zacks Rank #2 (Buy).

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