March 24, 2009 / 12:08 PM / 10 years ago

UPDATE 2-Hospira to cut 10 pct of jobs in efficiency drive

 * Hospira says '09 profit likely at top end of forecast
 * Plan aims for annual savings of up to $140 mln by 2011
 * Stock rises 7.8 pct
 (Adds earnings forecast, details on initiatives, share price)
 NEW YORK, March 24 (Reuters) - Medical products maker
Hospira Inc HSP.N said on Tuesday it expects to cut about 10
percent of its workforce, or 1,400 jobs, as part of a plan to
reduce costs and become more efficient.
 The company, whose shares rose almost 8 percent, said most
of its job cuts are expected within the next 12 months and that
its new "Project Fuel" restructuring initiatives this year could
create $8 million to $10 million in annualized pretax cost
 Hospira, in a conference call with industry analysts and
investors, reaffirmed it expects a profit of $2.62 to $2.72 per
share this year. But the restructuring will likely push
earnings toward the top of that range, the company said.
 Hospira also said it would consider exiting or divesting
nonstrategic assets aside from its main growth businesses of
generic injectable medicines and medication management systems,
including drug infusion pumps.
 Price increases or cost cutting might improve profitability
of its injectable products, Hospira officials said.
 The Lake Forest, Illinois-based company also expects to
produce savings by streamlining its product line.
 In connection with its actions, Hospira estimates it will
incur total pretax charges in the range of $140 million to $160
million, of which about $90 million to $100 million will be
incurred during 2009.
 The company, which employs more than 14,000, expects the
actions to result in annual cost savings of about $110 million
to $140 million by the second quarter of 2011.
 Hospira shares were up $2.04 or 7.8 percent at $28.37 on the
New York Stock Exchange on Tuesday afternoon.
 (Reporting by Lewis Krauskopf and Ransdell Pierson; Editing by
Derek Caney and Matthew Lewis)

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