Company News For Wednesday: GSK, SAN, VR, Cemex, Virgin Money, Stonegate

*GlaxoSmithKline (GSK) gave its Q2 results two ways, under accounting principals, and stripping out one-time losses and write-downs for restructuring and M&A into “core operating profit”. Surprise, surprise, the latter turned GSK's £1.8 bn loss ($2.35 bn, minus 9 pence/sh) into a net profit of £1.83 bn. Adjusted for currency effects this grew 15%, and handily beat the Dow Jones analyst poll core operating profit average of £1.64 bn. Core net profit as adjusted came in at 24.5 pence/sh.

Sales at £6.532 bn beat the consensus forecast of £6.34 bn. While as anticipated Advair sales fell 7% the pharma business overall saw sales rise 2% to £3.882 bn in the quarter. New drugs accounted for 23% of sales led by HIV drugs like Tivicay and Triumeq, and new respiratory lines like Relvar/Breo, Anora, Nucala, and Incruse. Vaccines did even better, up 11% in Q2 to £960 mn thanks to best-seller meningitis jabs and a 39% rise in vaccine operating profit and a 28% -plus core operating margin (up 6.4 percentage points) y/y.

Consumer healthcare lines acquired from NVS hit £1.7 bn; there is money in toothpaste and Advair after all the flak CEO Sir Andrew Witty took for the OTC businesses acquired last year. This business produced core operating profits of £238 mn, more than double 2015 levels, while sales only rose 7%. This was a key strategy switch for which the CEO got criticized by a whole slew of analysts, but he has been proven right. As price pressures on ethical drugs increase, what you want to do is sell OTC products,

Among the “one-offs” excluded from core operating profits were IPO share-based awards, strategic items, compensation for seniors leaving the firm, hedging losses, and a full kitchen sink of other stuff. It also excluded legal charges and accounting for the put option discount and preferential dividends paid under its jv with NVS, and unwinding of the contingent liability for taking control of the ViiV AIDs sub, a former jv with NVS, Pfizer, and Japan's Shinogi, mounting to £212 bn of the total, marginally lower than they cost in Q2 2015.

1 2 3 4
View single page >> |

Disclosure: None.

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.


Leave a comment to automatically be entered into our contest to win a free Echo Show.