* Q1 EPS ex-items 60 cents vs. analysts’ view 55 cents
* Sales fall 3.3 percent to $859.7 million
* Sees 2009 adjusted profit of $2.67-$2.72 per share
* Shares rise nearly 5 percent (Adds earnings details, CFO and analyst comments, share activity, byline)
By Susan Kelly
CHICAGO, April 28 (Reuters) - Hospira Inc HSP.N, which makes injectable generic drugs, said on Tuesday that quarterly net earnings more than doubled due to the favorable settlement of a U.S. income tax audit, and its shares rose nearly 5 percent.
The first-quarter results beat Wall Street expectations, helped by better-than-expected sales despite the weak economy, analysts said. They also cited strong gross margins and a reduced tax rate.
“Hospira’s core franchises performed slightly above our expectations,” JPMorgan analyst Taylor Harris said in a note to clients. “We see these results as a solid start to the year.”
Net income rose to $165.5 million, or $1.03 per share, from $65.4 million, or 41 cents per share, a year earlier.
Excluding special items, the company earned 60 cents per share. The average forecast on Wall Street was for a profit of 55 cents, according to Reuters Estimates.
Net sales fell 3.3 percent to $859.7 million, as unfavorable foreign currency translations and pricing pressure in specialty injectable pharmaceuticals overseas offset solid results in the company’s medication management systems and “other pharma” divisions.
Company executives said customers were signing contracts with the intention of implementing them in the second half of the year, suggesting hopes that the economy will rebound then.
“We don’t believe we’ve seen the bottom of the impact of capital restraints from the recession,” Chief Financial Officer Thomas Werner told analysts on a conference call. “Until the economy rebounds, we expect to see continued delays in customer implementation.”
Lake Forest, Illinois-based Hospira said it expected adjusted full-year earnings of $2.67 to $2.72 a share. It projected net income of $2.50 to $2.55 a share.
The company forecast flat net sales for the year, with growth of 4 percent to 6 percent without the impact of foreign exchange.
Shares of Hospira were up $1.44, or 4.6 percent, at $32.78 in morning New York Stock Exchange trade. (Reporting by Susan Kelly; Editing by Lisa Von Ahn)