GSK posts lift in sales thanks to weak sterling but stays cautious on threat of generic rivals

 
Rebecca Smith
GSK topped analyst forecasts but has remained cautious over the rise of rivals
GSK topped analyst forecasts but has remained cautious over the rise of rivals (Source: Getty)

GlaxoSmithKline has posted better than expected revenues for the first quarter, though the firm has warned the threat of generic rivals has clouded its forecast for full-year earnings.

Read more: GSK's new chief executive to be paid less than her male big pharma peers

The figures

GSK had sales growth across all three businesses, with weak sterling in the wake of the Brexit vote last June providing a boost to sales and adjusted earnings per share.

Revenue rose to £7.4bn from £6.2bn; analysts had forecast sales of £7.2bn, while adjusted earnings per share increased 31 per cent to 25p.

The firm also added it expects to pay an annual ordinary dividend of 80p for 2017, after declaring a first interim dividend for 2017 of 19p per share.

Despite the stronger sales, the pharma giant's share price dipped slightly; it was down 0.97 per cent at 1,583.5p at the time of writing.

Why it's interesting

The results are the first for Emma Walmsley as chief executive. Formerly GSK's consumer and healthcare lead, Walmsley took over from Sir Andrew Witty at the end of last month.

Not much time at all to expect Walmsley to provide much of a change to the results, though analysts did say they were keeping an eye out for news of the drug development pipeline, as well as potential changes to the outlook should more generic competitors to GSK's Advair asthma treatment come to market.

And GSK has warned of the rise of generic competitors for the drug, maintaining uncertain predictions from February, saying growth will be "flat to a slight decline" should new rivals spoil its party.

The firm said today it was "not able to give guidance for total results as we cannot reliably forecast certain material elements" of the results.

What the company said

Emma Walmsley, GSK's chief executive, said:

This is a positive start to the year with sales growth in all three of our businesses and an improvement in the group’s operating margin.

Our clear focus is on commercial execution and preparation for near-term launches in respiratory, HIV and vaccines.

We will be reviewing these and other priorities for the business with shareholders alongside our Q2 results on 26 July.

Read more: Weak pound delivers earnings boost for GSK

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