GSK share price rallies on better-than-expected Q1 earnings

Shares in GlaxoSmithKline (LON:GSK) have jumped more than two percent in early afternoon trade in London after the UK’s biggest drugmaker posted first-quarter sales and earnings which surpassed analyst expectations. The group saw strong growth of its HIV drugs which helped offset a decline in respiratory sales.

As of 13:24 BST, GSK’s share price had added 2.57 percent to 1,495.93p, outperforming the blue-chip FTSE 100 index which has climbed marginally into positive territory to stand 0.19 percent higher at 6,296.53 points. The pharmco’s shares have lost about four percent of their value over the past year, but are up nearly nine percent in the year-to-date.
GSK reported in a statement today that its sales had climbed 11 percent to £6.23 billion in the first three months of the year, generating core earnings per share (EPS) of 19.8p, up 14 percent year-on-year. Reuters noted that analysts, on average, had forecast sales of £6.01 billion and core EPS, which excludes certain items, of 17.9p.

The blue-chip pharmco said that its HIV sales had jumped as much as 57 percent during the reported period, helping offset a two-percent drop in GSK’s respiratory sales, partly reflecting a 24-percent decline in its flagship drug Advair in Europe, where the treatment is marketed as Seretide.
GSK’s chief executive Sir Andrew Witty, who is planning to step down next year, commented in the statement that the core EPS growth was an “encouraging start to the year,” with the company now expecting its full-year core EPS percentage growth to come in between 10 percent and 12 percent at constant exchange rates.
“This puts us on the right track to achieve the expectations we set out last year, although inevitably, we expect some quarter-to-quarter volatility in reported progress, particularly in our margins, given the dynamics of our businesses,” he added. Witty, who has been with the company for over three decades, is scheduled to step down in March next year. GSK has said that it will consider both internal and external candidates for the role.
As of 13:53 BST, Wednesday, 27 April, GlaxoSmithKline plc share price is 1,497.25p.