Hospira Inc. said Thursday that third-quarter sales jumped 29 percent thanks to the contribution from a major acquisition, but sharply higher interest outlays and research and development expenditures helped hold the increase in earnings to a more modest 6.3 percent.
The latest quarter “was one of solid growth for Hospira’s core products and continued progress across the company,” said Chairman and Chief Executive Christopher Begley, adding that the Lake Forest-based maker of specialty medication-delivery products remains “on track to achieve our 2007 earnings projections.”
Third-quarter net income was $59.4 million, or 37 cents a diluted share, in line with estimates and up from $55.9 million, or 35 cents a share, a year ago.
Sales, bolstered by the company’s $2.1 billion purchase of Mayne Pharma Ltd., surged to $833 million from $646.6 million a year earlier. Excluding the Mayne contribution, sales would have increased 4 percent.
In a reflection of the company’s significantly increased size, Hospira’s selling and administrative costs rose 32 percent, and the company’s R&D outlays climbed 41 percent, to $51.4 million. In addition, interest expense more than quadrupled, to $34.7 million from $8.1 million.
Hospira’s earnings got help from a lower tax rate, and the company’s income-tax expense actually declined 2.3 percent despite the higher operating profits. Excluding a host of unusual items in both quarters, Hospira said, per-share earnings rose to 49 cents a share from 45 cents a share.
Hospira stock added 21 cents, to $39.71, on the New York Stock Exchange.
In other earnings news:
– Cosi Inc. said its third-quarter loss widened, hurt by higher food, beverage and labor operating expenses.
The Deerfield-based restaurant company said it lost $3 million, or 8 cents a share, compared with a loss of $2.86 million, or 7 cents a share, a year earlier. Analysts were expecting a loss of 9 cents a share for the most recent period. Sales increased 8.7 percent, to $35.3 million, while same-store sales rose 1.7 percent. Same-store sales, or sales at stores open at least a year, are considered a key indicator of a retailer’s health.
The report came out after the close of trading.
– Allscripts Healthcare Solutions Inc. reported third-quarter net income of $4.12 million, or 7 cents a share, missing estimates by 4 cents a share and driving the stock down as much as 27 percent in after-hours trading.
A year ago, the Chicago-based maker of software for doctors had net income of $3.3 million, or 6 cents a diluted share. Total revenue in the latest period rose 18 percent, to $73.4 million. Revenue from software and related services increased 19.1 percent, to $59 million.
