Pharmaceutical and medical-device maker Hospira saw its earnings soar in the second quarter of 2014, thanks mostly to large sales of drugs that have been in short supply.
Shortages of specialty injectable pharmaceuticals, such as saline and other IV fluids, plagued hospitals last year because of a severe flu season. Hospira and Baxter International produce approximately 90% of U.S. saline products.
The market dominance and ability to command higher prices boosted Hospira's bottom line, CEO Michael Ball said in a morning call with investors. Global sales of specialty injectable pharmaceuticals rose 14% in the quarter, compared with the same period in 2013. In the Americas, those sales increased 17%. Net sales across the Lake Forest, Ill.-based company reached almost $1.14 billion in the second quarter, up 11%.
“Price continued to be a large contributor,” Ball said.
Hospira's second-quarter net profit more than doubled from $33 million in 2013 to $71 million this year. In the first six months, Hospira posted a $139 million profit, compared with a $44 million loss a year ago.
The strong quarter spurred executives to raise expectations for the rest of year. Adjusted diluted earnings per share for fiscal 2014 are now projected to hit between $2.30 and $2.50, compared with the previous EPS guidance of $2.00 to $2.25.
Ball declined to discuss a reported deal with Danone. This week, the Financial Times said Hospira was looking to acquire the medical nutrition business of Paris-based Danone—best known for its yogurt products—for about $5 billion. Ball said Hospira is “always looking at opportunities” to increase shareholder value, but he would not comment on the market speculation.
Hospira's shares were trading at $55.17 in late morning activity, up more than 6%.
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