Credit: Shutterstock photoGlaxoSmithKline plc GSK , one of the largest health care companies, reshaped its business following the Mar 2015 completion of the three-part, inter-conditional transaction with Novartis related to its Consumer Healthcare, Vaccines and Oncology businesses. Under the deal, Glaxo sold its oncology assets to Novartis and acquired Novartis' Vaccines business (excluding influenza vaccines). Additionally, the companies created a joint venture (JV), thereby combining their consumer divisions to form a larger consumer health care business.
Following the completion of the deal, the UK-based company now focuses on its three core businesses - Pharmaceuticals (respiratory, HIV), Vaccines (pediatric, adolescent, adult, and travel vaccines) and Consumer Healthcare (wellness, oral health, nutrition and skin health products).
However, like many of its peers, Glaxo is facing challenges in the form of stiff competition, genericization, pricing pressure and slowing growth in emerging marketsIn this scenario, investor focus remains on late-stage pipeline candidates and their commercial potential, restructuring and cost-cutting initiatives and performance of new products apart from the usual top-and bottom-line numbers.
Glaxo's performance has been pretty good so far, with the company's earnings beating expectations thrice in the trailing four quarters while missed in another. Overall, the company has delivered an average positive surprise of 1.41%.
Currently, Glaxo has a Zacks Rank #3 (Hold), but that could definitely change following the company's earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
Earnings Beat: Glaxo reported core earnings of 76 cents per American depositary share in the second quarter of 2018, which beat our consensus estimate of 71 cents.
Revenues Miss: Revenues were up 4% year over year at constant exchange rate (CER) to $9.9 billion (£7.3 billion). Revenues also beat Zacks Consensus Estimate of $9.5 billion.
Key Stats: While sales in Consumer Healthcare was up 3% and Pharmaceuticals were up 1%, the Vaccines segment increased 16% at CER.
2018 Guidance: Glaxo expects EPS growth of 7-10% at CER in 2018, if no Advair generics are launched this year. However, in the event of introduction of Advair generic in the U.S. market by October, Glaxo expects adjusted EPS of 4-7% at CER. The company also announced a restructuring program aiming to improve competitiveness and cut costs by 400 million pounds annually by 2021.
Key Update: Glaxo is investing $300 million in consumer genetics company 23andMe. The company entered into a four year collaboration with 23andMe that will focus on research and development of innovative new medicines and potential cures, using human genetics as the basis for discovery.
Share Price Impact: Shares rose almost 0.9% in pre-market trading .
Check back later for our full write up on GSK earnings report later!
GlaxoSmithKline plc Price and EPS Surprise
GlaxoSmithKline plc Price and EPS Surprise | GlaxoSmithKline plc Quote
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
