LAKE FOREST, Ill. (AP) — Hospira Inc.'s first-quarter earnings sank 73 percent as some manufacturing compliance issues at a North Carolina factory increased the injectable drug and medical device maker's costs.
The Lake Forest, Ill., company also said revenue slipped 4 percent due to a tough comparison with the first quarter of 2011, when Hospira had a strong launch of a generic version of the cancer drug Taxotere.
Hospira earned $40.2 million, or 24 cents per share, in the three months that ended March 31. That compares with net income of $149.9 million, or 88 cents per share, in the first quarter of 2011.
Adjusted earnings were 47 cents per share.
Revenue totaled $965.9 million, down slightly from more than $1 billion in the same period last year.
Analysts surveyed by FactSet expected, on average, earnings of 45 cents per share on $951 million in revenue.
Hospira's cost of products sold climbed 10 percent to $665.9 million in the quarter as it worked to improve regulatory compliance at its Rocky Mount, N.C., manufacturing facility. In April 2010, the Food and Drug Administration said the location's manufacturing processes did not comply with regulatory standards.
Global sales of the company's specialty injectable pharmaceuticals fell 8 percent to $586.4 million, while medication management revenue rose 7 percent to $256.2 million.
Hospira launched oncolytic docetaxel, its version of Sanofi's Taxotere, in March 2011, and a company spokesman said the drug has since gained competition. Hospira did not outline sales of the generic drug in its earnings release.
The company said it still expects adjusted earnings to remain in the range of $2 to $2.30 for 2012. Analysts expect, on average, earnings of $2.16 per share.
Hospira shares fell 37 cents to $34.75 in mid-morning trading, while broader indexes rose less than 1 percent.