LAKE FOREST, Ill. (AP) -- Drug and medical device maker Hospira Inc. said Wednesday it took a loss in the first quarter after it decided to take some of its older infusion pumps and devices off the market.
Hospira said it will retire older products like its Symbiq infusion device, GemStar pumps, and some of its Plum and PCA pumps. The company is setting up programs that will help its customers switch to newer products.
Most of the replacements will be made over the next two to three years and Hospira said it will continue support services for the older pumps during that time. In 2013 the program is expected to reduce its net income by about 95 cents per share.
Hospira said it lost $76.6 million, or 46 cents per share, in the first quarter. The company reported net income of $40.2 million, or 24 cents per share, a year ago. Hospira said it earned 52 cents per share in the latest quarter if one-time charges and gains are excluded, up from 47 cents per share a year ago. Because the company set aside money related to its new medical device plans, its revenue fell 8 percent to $884 million from $965.9 million.
Excluding the sales allowance, Hospira's revenue rose 2 percent to $988.3 million. It said revenue improved because of greater sales of the sedative Precedex and stronger prices for specialty injectable drugs.
Analysts expected the company to report net income of 44 cents per share on $984.6 million in revenue, according to FactSet.
The company expects to take a total of $128 million in charges in 2013. Those charges are related to its medical device plans, amortization, capacity expansions, and ongoing problems with quality at some of its medical device facilities.
Since 2010 Hospira has been trying to fix problems with the manufacturing processes at plants in Rocky Mount and Clayton, N.C. The Food and Drug Administration said the locations' manufacturing processes did not comply with required standards. The FDA also sent Hospira a warning letter in August 2012 after an inspection of a medical device facility in Costa Rica. Most of Hospira's infusion pumps are made at the Costa Rica plant.
Hospira now expects net income of 17 to 27 cents per share, or $2 to $2.10 per share in 2012 excluding the one-time charges. That's down from its previous estimate of $2.05 to $2.20 per share. Analysts were expecting net income of $2.03 per share on average.
Shares of Hospira lost 63 cents to $32.49 in midday trading.
- Health Care Industry
- medical device