GlaxoSmithKline lifts full-year earnings guidance as Q2 profits rise
GlaxoSmithKline said on Wednesday that full-year earnings are set to drop less than it previously expected, as it posted a rise in second-quarter sales and profits.
FTSE 100
8,121.61
09:00 26/04/24
FTSE 350
4,459.25
09:00 26/04/24
FTSE All-Share
4,412.48
09:00 26/04/24
GSK
1,641.50p
09:00 26/04/24
Pharmaceuticals & Biotechnology
22,777.07
08:59 26/04/24
Group sales increased 5% at constant exchange rates to £7.8bn during the quarter, beating expectations for sales of £7.65bn. Sales of shingles vaccine Shingrix provided a boost, rising to a record £386m, driven by continued strong uptake in the US.
Pre-tax profit rose to £1.26bn in Q2 from £614m the year before and adjusted earnings per share came in at 30.5p, beating analysts' expectations of 25.18p.
The pharmaceuticals giant said it now expects 2019 adjusted earnings per share to drop between 3% and 5% at constant exchange rates, which is an improvement on the 5% to 9% decline it previously guided to.
Chief executive officer Emma Walmsley said: "GSK delivered continued good operating performance in Q2 despite the loss of exclusivity of Advair. We are increasing our expectations for the year and have updated our guidance for 2019.
"We remain focused on strengthening our R&D pipeline and the execution of new product launches. Positive clinical data received so far this year offer significant new opportunities for products in oncology, HIV and respiratory and we expect more important readouts in the second half of the year. We also expect to complete our joint venture with Pfizer shortly, laying the foundation for the creation of two great companies: one in pharmaceuticals/vaccines; one in consumer healthcare."
Glaxo also said in an earlier statement on Wednesday that Jonathan Symonds will succeed Philip Hampton as non-executive chairman with effect from 1 September. Symonds, who is currently deputy group chairman at HSBC Holdings, was previously chief financial officer of Novartis and AstraZeneca and has been a non-executive director of Diageo and Qinetiq.
At 1315 BST, the shares were up 0.8% at 1,673.60p.
Ian Forrest, investment research analyst at The Share Centre, said: "These are good results from Glaxo and it was no surprise to see the shares responding positively to the improved prospects for the second half. Advair is clearly facing an uphill battle in the US but the positive news on the pipeline of new drugs is reassuring for investors, as is the commitment to hold the dividend.
"The shares have outperformed the market over the past year and still offer a decent 4.8% prospective yield. As a result, we continue with our 'buy’ recommendation for investors seeking income and willing to accept a lower level of risk."