GSK share price steady as pharmco’s earnings beat estimates

on Feb 6, 2019
Updated: Mar 11, 2020

Shares in GlaxoSmithKline (LON:GSK) have climbed into positive territory in London in today’s session as the company’s full-year earnings surpassed analyst estimates as the company benefited from strong performance of its shingles vaccine. The blue-chip drugmaker, however, cautioned that earnings are set to fall this year following the recent approval of a generic version of the group’s flagship respiratory drug Advair in the US.

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As of 12:56 GMT, GSK’s share price had added 0.20 percent higher at 1,525.60p. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index having slipped marginally into the red and currently standing 0.08 percent lower at 7,172.00 points.

GSK posts FY results

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GKS announced in a statement today that its sales had climbed two percent to £30.8 billion last year. For the last quarter of 2018, the pharmco posted a seven-percent rise in turnover to £8.2 billion. Adjusted earnings per share meanwhile came in 14 percent higher at 31.2p for the last three months of the year. Reuters noted in its coverage of the news that analysts had expected earnings of 27.7p per share and sales of £7.95 billion, according to a company-provided consensus of 11 analysts.

“GSK delivered improved operating performance in 2018 with Group sales growth, strong commercial execution of new product launches, especially Shingrix, continued cost discipline and better cash generation,” the pharmco’s chief executive Emma Walmsley commented in the statement.

Generic Advair hit

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Going forward, however, GSK expects its adjusted earnings per share to decline by between five percent and nine percent at constant exchange rates reflecting recent approval of a generic competitor to Advair in the US, as well as the expected impact of the Tesaro acquisition. The guidance also assumes that the proposed Consumer Healthcare nutrition disposal will close by the end of the year, and that the proposed Consumer Healthcare Joint Venture with Pfizer will wrap up in the second half of 2019.

As of 13:34 GMT, Wednesday, 06 February, GlaxoSmithKline plc share price is 1,525.60p.

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