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LONDON (Alliance News) - GlaxoSmithKline PLC Wednesday reiterated its guidance for 2015 and said it remains confident in its outlook for 2016, as it reported a rise in pretax profit for the third quarter of 2015.
The FTSE-100 listed pharmaceutical giant reported a pretax profit of GBP867 million for the quarter to end-September, up from GBP548 million a year before, as revenue rose to GBP6.13 billion from GBP5.65 billion.
Glaxo proposed a third quarter dividend of 19 pence, and reiterated its expectation for a full year dividend of 80 pence.
The company attributed its performance to benefits from its three-part deal with Novartis AG last year "becoming evident" in its sales and earnings performance, alongside progress in its restructuring and integration programmes. Under the deal, Glaxo agreed to sell the Swiss company its oncology portfolio, buy Novartis' global vaccines business, and create a joint consumer healthcare business.
This takes its performance for the first nine months of 2015 to a pretax profit of GBP10.9 million, up from GBP2.4 million, as revenue growth to GBP17.64 billion from GBP16.82 billion was boosted by exceptional gains related to the sale of its oncology business to Novartis.
Revenue in the quarter was driven by 32% growth in vaccines and 55% growth in consumer health sales, which offset a decline of 7% in the company's pharmaceuticals business. On a pro-forma basis, stripping out the effect of the Novartis deal, revenue rose 5% in the quarter, with pharmaceuticals up 1%, vaccines up 13% and consumer health up 7%.
Glaxo has previously guided for a core earnings per share decline at a high-teens percentage rate on a constant currency basis for 2015, mostly due to pricing pressure on obstructive pulmonary disease treatment Advair in the US and Europe, and the dilutive effect of its deal with Novartis.
Core earnings per share in the quarter was 23.0 pence, down 13% at constant currency and 18% at actual rates, hit by the strength of sterling against the majority of the company's trading currencies, partly offset by the weakening of sterling against the US dollar.
For 2016 the company expects significant recovery in core earnings per share, with percentage growth expected to reach double digits on a constant currency basis.
Shares in Glaxo were up 3.9% at 1,420.00 pence Wednesday afternoon.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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