We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Glaxo (GSK) Beats Q2 Earnings Estimates, Revenues Up Y/Y
Read MoreHide Full Article
GlaxoSmithKline plc (GSK - Free Report) reported second-quarter 2016 core earnings of 70 cents per American Depositary Share (ADS), beating the Zacks Consensus Estimate of 55 cents.
Core earnings were also up 16% year over year at a constant exchange rate (CER). On the other hand, revenues grew 4% at CER to £6.5 billion driven by all of its business segments. The top line was primarily backed by sales growth of new pharmaceutical and vaccine products.
All growth rates mentioned below are on a year-on-year basis and at CER.
Quarterly Highlights
Glaxo reports results under three segments: Pharmaceuticals, Vaccines and Consumer Healthcare.
While revenues at the Pharmaceuticals and Consumer Healthcare segments were up 2% and 7%, respectively, the Vaccines segment witnessed an 11% surge.
New Pharmaceutical and Vaccine products – like Relvar/Breo Ellipta and Eperzan/Tanzeum among others – registered sales of £1.05 billion in the reported quarter. Glaxo expects these products to deliver at least £6 billion in annual revenues by 2018.
However, within Pharmaceuticals, sales were down 9% in International Pharmaceuticals. Sales in Emerging Markets (down 9%) were impacted by continued pressure on the Chinese business from healthcare reforms, which include significant price reductions and ongoing business restructuring at the company.
The segment also saw a 1% decline in U.S. sales, which was a result of generic competition for Avodart (down 36%) and dwindling sales of Relenza (down 97%) due to a reallocation of government funding. In Europe too, sales were down 7% mainly due to an 11% decline in Respiratory sales.
Sales of Glaxo’s respiratory drug Advair/Seretide continued to decline (13%) in the quarter.
Nevertheless, robust sales of Tivicay (£225 million) and Triumeq (£409 million) drove a 44% surged at the HIV segment in the reported quarter.
In the Consumer Healthcare division, sales witnessed an increase in the U.S. (9%), Europe (1%) and International markets (9%). Growth was primarily driven by contributions from the Wellness and Oral health brands such as Flonase OTC, Excedrin, Voltaren and Sensodyne.
Meanwhile, the Vaccines segment benefited from the continued uptake of newly acquired meningitis vaccine, Bexsero, from Novartis AG (NVS - Free Report) .
Glaxo has lifted its outlook for 2016. The core earnings percentage growth rate is now expected to be in the range of 11–12%.
Pipeline Update
Glaxo continues to progress with the candidates in its pipeline. In the second half of 2016, the company expects to execute four significant regulatory filings – Closed Triple for chronic obstructive pulmonary disease, Shingrix vaccine for shingles, Benlysta subcutaneous formulation for systemic lupus erythematosus and sirukumab for rheumatoid arthritis.
Our Take
Glaxo’s second-quarter 2016 results were impressive with the company beating earnings expectations. Moreover, revenues were up on a year-over-year basis driven by contributions from each of its business segments. We are also positive on the performance of both new and acquired products. These should help support the top line in the future and ease the impact of generic erosion of Advair. Further, we are encouraged by Glaxo’s efforts on developing its pipeline candidates.
Glaxo is a Zacks Rank #3 (Hold) stock. A couple of better-ranked stocks in the health care sector are Innoviva, Inc. (INVA - Free Report) and ANI Pharmaceuticals, Inc. (ANIP - Free Report) , both sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Glaxo (GSK) Beats Q2 Earnings Estimates, Revenues Up Y/Y
GlaxoSmithKline plc (GSK - Free Report) reported second-quarter 2016 core earnings of 70 cents per American Depositary Share (ADS), beating the Zacks Consensus Estimate of 55 cents.
Core earnings were also up 16% year over year at a constant exchange rate (CER). On the other hand, revenues grew 4% at CER to £6.5 billion driven by all of its business segments. The top line was primarily backed by sales growth of new pharmaceutical and vaccine products.
All growth rates mentioned below are on a year-on-year basis and at CER.
Quarterly Highlights
Glaxo reports results under three segments: Pharmaceuticals, Vaccines and Consumer Healthcare.
While revenues at the Pharmaceuticals and Consumer Healthcare segments were up 2% and 7%, respectively, the Vaccines segment witnessed an 11% surge.
New Pharmaceutical and Vaccine products – like Relvar/Breo Ellipta and Eperzan/Tanzeum among others – registered sales of £1.05 billion in the reported quarter. Glaxo expects these products to deliver at least £6 billion in annual revenues by 2018.
However, within Pharmaceuticals, sales were down 9% in International Pharmaceuticals. Sales in Emerging Markets (down 9%) were impacted by continued pressure on the Chinese business from healthcare reforms, which include significant price reductions and ongoing business restructuring at the company.
The segment also saw a 1% decline in U.S. sales, which was a result of generic competition for Avodart (down 36%) and dwindling sales of Relenza (down 97%) due to a reallocation of government funding. In Europe too, sales were down 7% mainly due to an 11% decline in Respiratory sales.
Sales of Glaxo’s respiratory drug Advair/Seretide continued to decline (13%) in the quarter.
Nevertheless, robust sales of Tivicay (£225 million) and Triumeq (£409 million) drove a 44% surged at the HIV segment in the reported quarter.
In the Consumer Healthcare division, sales witnessed an increase in the U.S. (9%), Europe (1%) and International markets (9%). Growth was primarily driven by contributions from the Wellness and Oral health brands such as Flonase OTC, Excedrin, Voltaren and Sensodyne.
Meanwhile, the Vaccines segment benefited from the continued uptake of newly acquired meningitis vaccine, Bexsero, from Novartis AG (NVS - Free Report) .
GLAXOSMITHKLINE Price and EPS Surprise
GLAXOSMITHKLINE Price and EPS Surprise | GLAXOSMITHKLINE Quote
Outlook
Glaxo has lifted its outlook for 2016. The core earnings percentage growth rate is now expected to be in the range of 11–12%.
Pipeline Update
Glaxo continues to progress with the candidates in its pipeline. In the second half of 2016, the company expects to execute four significant regulatory filings – Closed Triple for chronic obstructive pulmonary disease, Shingrix vaccine for shingles, Benlysta subcutaneous formulation for systemic lupus erythematosus and sirukumab for rheumatoid arthritis.
Our Take
Glaxo’s second-quarter 2016 results were impressive with the company beating earnings expectations. Moreover, revenues were up on a year-over-year basis driven by contributions from each of its business segments. We are also positive on the performance of both new and acquired products. These should help support the top line in the future and ease the impact of generic erosion of Advair. Further, we are encouraged by Glaxo’s efforts on developing its pipeline candidates.
Glaxo is a Zacks Rank #3 (Hold) stock. A couple of better-ranked stocks in the health care sector are Innoviva, Inc. (INVA - Free Report) and ANI Pharmaceuticals, Inc. (ANIP - Free Report) , both sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>