GSK share price: Drugmaker’s sales drop two percent in Q1

on Apr 30, 2014
Updated: Apr 9, 2020
Listen, Wednesday, April 30: GlaxoSmithKline Plc (LON:GSK) posted a drop in first-quarter turnover with sales in the US falling amid competition in the respiratory market.

GSK’s share price has lost about 1.4 percent in London so far today.
**GSK Q1 results**
GSK said today in a statement that its first-quarter sales had dropped two percent to £5.6 billion on a constant-exchange-rate (CER) basis. Core earnings per share rose two percent to 21.0p on a CER basis, while core operating profit was 18 percent down at £1.53 billion. Analysts polled by Thomson-Reuters had forecast sales of £5.84 billion and core EPS of 20.7p.

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GSK recorded pharmaceuticals and vaccines sales growth in all major regions except in the US where sales dropped by ten percent, impacted by continued competition in the respiratory market. In China, where the company is engulfed in a bribery probe, sales fell 20 percent to £58 million, adversely impacting GSK’s emerging markets sales growth by two percentage points.

Chief executive Andrew Witty reiterated GSK’s target of increasing 2014 EPS by between four and eight percent, and added that the recently announced deal with Switzerland’s Novartis (VTX:NOVN) would strengthen the sustainability of GSK’s sales base and improve the long-term outlook of the company.
Last week, GSK said that it had agreed a major transaction with Novartis which will see the two companies create a new consumer healthcare business. (GSK share price jumps on multibillion dollar deal with Novartis) As part of the three-way deal, GSK will acquire Novartis’ global Vaccines business excluding influenza vaccines, while the Swiss company will acquire Glaxo’s oncology products.

In February, GSK posted a mixed set of results, reporting that its full-year earnings per share had climbed four percent year-on-year to 112.2p on a constant-exchange-rate basis, while Q4 core operating profit dropped eight percent to £2.09 billion. (GSK share price up as company flags revenue growth in 2014)

**Analysts on GSK**
Shore Capital Stockbrokers on Monday reaffirmed GSK as a ‘buy’ without specifying a price target. Analysts at UBS last week reiterated their ‘neutral’ rating on the UK-listed pharma giant with a price target of 1,500p, while Deutsche Bank, which has a ‘hold’ rating on the FTSE 100 company, boosted its price target from 1,620p to 1,750p.
GSK currently has a consensus ‘hold’ rating and an average price target of 1,714.78p.
**As of 12:22 BST, buy GSK shares at 1645.50p.**
**As of 12:22 BST, sell GSK shares at 1644.00p.**


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