The good news for Hospira: Quarterly sales rose 2.2% to more than $1 billion. The not-so-good: The costs of fixing manufacturing problems pushed earnings into the red. The company's net loss amounted to $212.3 million, or $1.30 per diluted share, Reuters reports.
According to documents filed with the Securities and Exchange Commission, Hospira's ($HSP) efforts to fix quality issues at its Rocky Mount, NC, facility have resulted in drug shortages, reduced production volume and associated costs. The company took charges of $36.8 million for third-party oversight and consulting costs in 2011, plus the financial fallout from reduced production. The company also took inventory losses of $28.5 million at the Rocky Mount facility.
The FDA scrutiny has led to manufacturing "interruptions [that] have adversely impacted, and continue to adversely impact, Hospira's ability to manufacture and sell its products," the company said in its 10-K filing. Hospira is expecting the manufacturing overhaul to continue to affect earnings: Its forecast for 2012 includes charges of 50 cents to 62 cents per share to cover the cost of addressing product and quality-related matters, Reuters reports.
- see the SEC filing
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