Hospital products and generic drugmaker Hospira Inc on Tuesday said quarterly net earnings rose 42 percent, fueled by a new product launch, and it raised its full-year profit forecast.

Earnings excluding items beat analysts' average forecast by 21 cents a share due to unexpectedly strong demand for the company's newly launched generic colon cancer treatment.

Hospira shares rose $1.07, or 2.31 percent, to $47.37, reflecting expectations that demand for the new drug will taper off going forward, analysts said.

Third-quarter net income was $116.2 million, or 71 cents a share, compared with $81.8 million, or 51 cents a share, a year ago. Excluding special items, Hospira said it earned 90 cents a share.

Analysts had expected a profit of 69 cents a share, according to Thomson Reuters I/B/E/S.

Net sales rose about 9 percent to $1.01 billion in the quarter, boosted by the U.S. launch of generic oxaliplatin solution to treat colon cancer.

Within pharmaceuticals, we suspect that inventory build associated with the launch of generic oxaliplatin (eloxatin) contributed almost all of the upside relative to our forecasts, Goldman Sachs analyst David Roman said in a note to clients.

Global pharmaceutical sales rose 14.3 percent, driven by specialty injectables, while sales of medical devices fell 3.4 percent due to reduced spending by hospitals in the recession.

Lake Forest, Illinois-based Hospira said it continues to expect net sales for the year to rise about 5 percent to 7 percent, excluding the impact of foreign exchange translations, and to be up slightly including foreign exchange.

The company said it now expects full-year adjusted 2009 earnings of between $2.85 and $2.90 a share, up from the previous outlook of $2.80 to $2.85 a share.

Analysts said the forecast looked conservative, with the sales outlook unchanged.

Given the fact that the company only raised full-year guidance by $0.05, despite the $0.21 beat in the quarter, suggests to us that one-time inventory stocking was the key driver of upside in the quarter, Roman wrote.

Company executives on a conference call said customers accelerated purchases of oxaliplatin in the third quarter, and that exceptionally strong demand was expected to slow in the fourth quarter.

The company's full-year outlook also reflects expectations that hospital budgets with remain constrained and delays in production of the H1N1 vaccine, executives said. Hospira does not make the vaccine, but can package it into syringes.

(Reporting by Susan Kelly, editing by Maureen Bavdek)