GSK reports lower-than-expected Q4 sales and guides lower

Drug giant GlaxoSmithKline posted lower-than-expected fourth quarter sales, although profits were in-line with estimates from analysts in the City.

For the fourth quarter of 2019, Glaxo reported a roughly 9.0% rise in sales to £8,899m (consensus: £9,054m), while on an adjusted basis, earnings per share came in at 26.2p (consensus: 26.0p), for an approximately 6.0% gain on a year ago.

The company's free cash flow on the other hand plummeted 22% to £2,599m.

"In 2020, our first priority remains Innovation, to progress our pipeline and support new product launches. Recent data readouts underpin our decision to further increase investment in R&D and these new products," said GSK boss Emma Walmsley.

But that did not mean that GSK would take its eye off operational execution, she added.

That included a successful integration in Consumer Healthcare and starting a two-year programme to split the company into two, with one firm focusing on biopharma and the other on consumer healthcare.

For the quarter, and at actual exchange rates, Pharmaceutical sales fell 5% to £4,558m, while Vaccine sales increased 18% to £1,742m and those in Consumer Healthcare were up by 35% to £2,571m.

Within pharma, Respiratory sales rose 9% to £892m, thanks to higher revenues from Trelegy Elipta and Nucala, revenues from HIV were flat at £1,257m amid declining sales of Juluca and Dovato, and those from Established Pharmaceuticals dropped 15.0% to £2,173m.

Regarding the outlook, management guided towards a 1.0-4.0% drop in earnings per share in 2020 at constant exchange rates and an unchanged full-year payout of 80.0p.

"This guidance excludes any impact in 2020 from any further material divestments beyond those previously announced and any potential impact on our business from the Coronavirus outbreak."

For the fourth quarter, GSK set its dividend per share at 23.0p.