UPDATE 1-Weak pound buoys GSK but drugmaker warns on 2017 generic threat

* 2017 core EPS seen flat-lower if mid-year generic Advair

* Current exchange rates would lift 2017 sterling EPS 9 pct

* Q4 2016 core EPS 26.1 pence vs consensus forecast 25.0p (Adds CEO comments, shares, background on new CEO)

By Ben Hirschler

LONDON, Feb 8 (Reuters) - GlaxoSmithKline quarterlysales and profits beat expectations, buoyed by a weak pound, butthe drugmaker warned earnings stripping out currencies couldslip in 2017 if generic copies of its lung drug Advair arrive inthe United States.

Outgoing Chief Executive Andrew Witty, presenting his finalset of results, said the 2017 profit outlook was "veryconsistent" with market consensus and showed GSK was well placedto absorb the potential loss of Advair.

GSK is buttressed by its large consumer health and vaccinesunits, while the core pharmaceuticals business is seeingincreased demand for new drugs.

"Once we are through this window of Advair, the companydoesn't really have any material patent expirations until thelate 2020s, which is an extraordinarily long period of time,"Witty told reporters.

GSK shares slipped around 1 percent following Wednesday'sresults. UBS analyst Michael Leuchten said the 2017 outlookmight cause some confusion but was broadly in line withexpectations.

Quarterly sales rose 21 percent in sterling terms to 7.59billion pounds ($9.48 billion), generating core earnings pershare (EPS) up 45 percent at 26.1 pence.

Analysts, on average, had forecast sales of 7.45 billionpounds and core EPS, which excludes certain items, of 25p,Thomson Reuters data shows.

GSK said EPS, in constant currencies, were set to be flat toslightly lower in 2017, if substitutable generic copies ofAdvair arrive in the United States by mid-year, as most analystsexpect. If generics don't launch, core EPS should increasebetween 5 and 7 percent.

If January 2017 average exchange rates were applied to thewhole of 2017, sterling core EPS would benefit by around 9percent, the group added.

HIGHLY PROFITABLE

GSK has been preparing for the loss of Advair exclusivityfor the past two years but the potential launch of generics willstill be a blow, since the medicine is highly profitable and hassold more than a $1 billion annually since 2001.

The U.S. Food and Drug Administration is due to decidewhether to approve the first substitutable Advair generic, fromMylan, by March 28. A rival version from Hikmaand Vectura has an approval decision date of May 10.

It will be up to Witty's successor Emma Walmsley, 47, tosteer GSK through the challenge when she takes over on April 1.Witty said she was likely to give a strategy update in thesecond half of 2017.

Britain's largest pharmaceuticals company, which generatesmore than 95 percent of its sales overseas, has been one of thebiggest beneficiaries of the pound's sharp depreciation sincelast year's Brexit referendum.

That has cut worries about dividend payouts and lifted thescope for acquisitions, while GSK's high-volume, lower-marginpharma strategy is looking smarter today than a few years backas U.S. President Donald Trump attacks high drug prices.

GSK's upcoming new medicines include a novel inhaler thatcombines three medicines in one device and a promising vaccinefor shingles. But the company also faces competition in itssuccessful HIV business from a new Gilead medicine.

($1 = 0.8005 pounds)

(Reporting by Ben Hirschler; editing by Martinne Geller andSusan Thomas)