GSK misses analysts’ estimates for net quarterly sales and earnings per share in Q4

GlaxoSmithKline (GSK) announced its quarterly performance results on Wednesday that came out short of the analysts’ estimates. The company cited pricing pressure to have weighed on its performance in the fourth quarter. GSK’s respiratory drugs were noted to have taken the hardest hit due to the pricing pressure in the recent quarter. The company further added that adjusted earnings in fiscal 2020 are expected to fall sharply by 4 percent.

Trading at $45 in the stock market at the day close on Wednesday, GSK’s stock marked a little over 2% decline following the release of the earnings report. GSK has recently announced its plans to merge its OTC products (over-the-counter) with a Pfizer venture. In its Wednesday’s announcement, the company highlighted that the split has already begun.

Net Quarterly Sales Climbed 11% And Were Reported At £8.90 billion In Q4

In 2019’s fourth quarter, GSK boasted an 11% increase in sales that were reported at £8.90 billion. In terms of adjusted earnings, the company posted 24.8 pence per share in the recent quarter. Analysts, on the other hand, were expecting the company to earn a higher 25.8 pence per share while quarterly sales were estimated at £9 billion.

Following a 1% increase in adjusted profit in 2019, GSK says that a hit of 1% to 4% can be expected in fiscal 2020 on the adjusted profit front that the company estimated at 123.9 pence per share. The recent guidance for this year, however, didn’t account for the recent Coronavirus outbreak in China and its potential impact on GSK’s performance. The virus currently has a death toll of 500 in China.

Sales in the pharmaceutical unit dropped 4% in the fourth quarter and were noted at £4.56 billion. Another £1.26 billion worth of sales were recorded in HIV. At £1.74 billion, turnover in vaccines expanded by 21% that was primarily attributed to higher demand for Shingrix.

Vaccines And Relevant Treatments Are Likely To Be The Growth Drivers For GSK

Now that GSK has merged its OTC products unit with a Pfizer venture, vaccines and other relevant treatments including the ones directed at HIV are likely to be the growth drivers for GSK in the upcoming quarters. CEO Emma Walmsley plans on rejuvenating the pharmaceutical company as a component of which, she has let go of multiple businesses and products.

GSK’s performance in the stock market in 2019 was reported upbeat with an annual gain of just over 20%.