Hill-Rom Q1 Earnings Fall, Slashes FY14 Outlook; To Cut 350 Jobs

(RTTNews) - Hill-Rom Holdings, Inc. (HRC), a provider of medical technologies to the health care industry, Thursday reported a plunge in earnings for the first quarter mainly due to a decline in revenue. Further, the company lowered its guidance for the full year 2014 and plans to cut five percent of its workforce to improve long-term margins.

Earnings for the quarter decreased to $13.2 million, or $0.22 per share, from $24 million, or $0.39 per share, a year ago.

Earnings per share, excluding certain items, declined to $0.36 from $0.54 a year ago. On average, nine analysts polled by Thomson-Reuters estimated the company's earnings to be $0.51 for the quarter. Analysts' estimates typically exclude special items.

For the three months to December, adjusted EBITDA fell to $54 million from $75 million last year.

Total revenue for the three-month period declined to $393.4 million from $428.4 million a year ago.

The company said it has initiated a restructuring program which will result in reduction of 350 positions in U.S. and Europe. The U.S. portion of restructuring is expected to be completed in the next quarter, but the Europe restructuring is expected to take two years. The company anticipates a savings of $30 million on an annual basis, with $15 million to $20 million to be incurred in the coming quarter.

For the full-year 2014, Hill-Rom lowered its guidance for adjusted earnings per share to $2.18 to $2.28 from the prior-projected range of $2.43 to $2.51. Hill-Rom also decreased its revenue growth guidance; the company now expects revenue decline of about 2 to 4 percent compared with the previously-projected revenue growth of about 1 percent. Analysts expect the company to report adjusted earnings per share of $2.45 and revenue of $1.74 billion for 2014.

For the second quarter, the company expects adjusted earnings per share of $0.50 to $0.53. Analysts estimate $0.61 per share.

Wednesday, the stock closed at $44.16 on the NYSE.