UPDATE: Hospira Earnings: Tops Revenue Estimate

S&P 500 (NYSE:SPY) component Hospira Inc. (NYSE:HSP) reported its results for the third quarter. Hospira is a global specialty pharmaceutical and medication delivery company that develops products that help improve the safety and productivity of patient care.

Earnings season is back and more important than ever. Get our newest CHEAT SHEET stock picks now

Hospira Inc. Earnings Cheat Sheet

Results: Reported a profit of $1.2 million (one cent per diluted share) in the quarter. Hospira Inc. had a net loss of $88.9 million or a loss 54 cents per share in the year-earlier quarter.

Revenue: Rose 1.8% to $994 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Hospira Inc. reported adjusted net income of 47 cents per share. By that measure, the company beat the mean estimate of 45 cents per share. It beat the average revenue estimate of $951 million.

Quoting Management: “Results for the third quarter were in line with our expectations, and we continued to advance our overall quality improvement initiatives,” said F. Michael Ball, chief executive officer. “We remain fully committed to reinforcing Hospira’s foundation, and we believe we are making progress in this regard. As we head toward the end of what has been a challenging year for Hospira, I am pleased with our dedicated focus, the improvements we are making across the organization and the advancements of Hospira’s growth expansion initiatives. I remain confident that our actions are positioning Hospira to be a stronger, more competitive global company, one that will serve the needs of our customers and patients, and deliver strong value to our shareholders.”

Key Stats:

Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell 9.6 percentage points from the year-earlier quarter to 21.6%. Over that time, margins have contracted on average 8.9 percentage points per quarter on a year-over-year basis.

Last quarter’s year-over-year revenue increase follows two quarters of revenue declines. Revenue fell 2.9% in the second quarter and fell 3.6% in the first quarter.

The company has now beaten estimates the last two quarters. In the second quarter, it topped expectations with net income of 51 cents versus a mean estimate of net income of 49 cents per share.

The company reported a profit last quarter after being in the red the prior quarter. In the first quarter, the company booked a net loss of $40.2 million, or a loss of 24 cents per share.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 57 cents a share to 56 cents over the last ninety days. In the past month, the average estimate for the fiscal year has fallen from $2.01 per share to $2.

Competitors to Watch: Teva Pharmaceutical Industries Ltd, Mylan Inc., Akorn, Inc., Novartis AG, Baxter International Inc., Watson Pharmaceuticals, Inc., Pfizer Inc., DURECT Corporation, ICU Medical, Incorporated, and Allergan, Inc.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

Don’t Miss These Additional Hot Stories:

Is AT&T’s Stock a Buy as iPhone Sales Soar?

Is the U.K. a Tech Company Tax Haven?

Should Apple’s CEO Be President of the United States?