GlaxoSmithKline ups earnings forecast as sales momentum builds

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GlaxoSmithKline PLC (LSE:GSK) increased its forecast for earnings this year as sales increased in all its core divisions in its latest quarter.


Revenues in the three months to end September quarter rose by 5% overall to US$9.1bn.


As a result, earnings in 2021 are now expected to decline by between 2% to 4%, compared to a predicted fall of mid to high-single-digit per cent made in July.


Glaxo’s chief executive Emma Walmsley, who is under pressure from activist investors, said it was a strong business performance from the FTSE 100 group in the quarter.


Walmsley highlighted double-digit sales growth in Pharmaceuticals and Vaccines, increased momentum in Consumer Healthcare, and continued discipline on costs.


Glaxo is pushing ahead with plans to demerge its consumer healthcare business in spite of calls for its sale by activists Elliott Management and BlueBell.


They have also called for her not to be in charge of demerged pharma arm, but so far other shareholders have resisted calls for a change.


Going forward, Walmsley said these results reinforced its confidence that Glaxo is set for a step-change in growth and performance in 2022 and beyond


The dividend was maintained at 19p and Glaxo reiterated it would pay 80p for the full year.


One area of concern would be the struggles of Shingrix.


Sales of the shingles vaccine were strong as clinics restocked after the pandemic but this is likely to be a one-off said Glaxo, with prescriptions in the US now being affected by the spread of Delta Plus after being badly disrupted by the first waves of the pandemic.


This has prompted it to reduce its estimates for vaccines revenues in 2021 to a mid-single-digit decline compared to flat previously.


Covid product sales in the quarter were also modest at GBP209mln comprising Xevudy at GBP114mln and its pandemic adjuvant at GBP94mln.


Shares rose 3% to 1,479p.

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