GlaxoSmithKline 4Q Pretax Profit Rose But Sees Falling Earnings in 2020

By Carlo Martuscelli

GlaxoSmithKline PLC (GSK.LN) reported rising profit before tax in the final quarter of the year on Wednesday, but missed analyst forecasts across several metrics and guided for declining earnings in the year ahead.

Pretax profit in the fourth quarter was 1.71 billion pounds ($2.22 billion), up from GBP1.37 billion the year before. Sales increased by 8.6% to GBP8.90 billion, missing a consensus analyst forecast of GBP9.03 billion provided by FactSet.

Adjusted earnings per share--a metric closely watched by analysts that strips out one-off items--fell by 16% when accounting for currency effects, to 24.8 pence, missing analyst forecasts of 30 pence.

The British pharmaceutical major is facing heavy investments into research as it continues to rebuild its pipeline of cancer drugs after having divested its oncology portfolio in 2014, as well as competition to its best-selling inhaler Advair.

Looking ahead, the FTSE 100-listed company said that it expects adjusted EPS to decline by between 1% and 4% at constant rates in 2020, citing a two-year period of mounting investment in its key new products.

Glaxo declared a dividend of 80 pence for the year and said it expects the pay-out to remain unchanged in 2020.

Shares of the company at 1227 GMT traded 2.6% lower at GBP17.68.

Write to Carlo Martuscelli at [e-mail]; @carlomartu

(END) Dow Jones Newswires

February 05, 2020 07:43 ET (12:43 GMT)

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