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GSK Gsk Plc

1,708.60
3.40 (0.20%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Gsk Plc LSE:GSK London Ordinary Share GB00BN7SWP63 ORD 31 1/4P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  3.40 0.20% 1,708.60 1,708.60 1,708.80 1,713.00 1,699.40 1,701.60 11,522,668 16:29:59
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Pharmaceutical Preparations 30.33B 4.93B 1.1970 14.27 70.34B

GSK Posts Sharp Fall in Profit

29/07/2015 1:10pm

Dow Jones News


Gsk (LSE:GSK)
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From Mar 2019 to Mar 2024

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LONDON—GlaxoSmithKline PLC on Wednesday reported a sharp drop in net profit for the second quarter, reflecting the increased dominance of lower-margin vaccines and over-the-counter medicines in the company's portfolio following its $20 billion asset swap with Novartis AG.

The drug maker said net profit slid 77% to £ 149 million ($233 million) compared with the same period last year, despite a 6% rise in revenue to £ 5.89 billion, in the first full quarter since the Novartis transaction completed. Core operating profit, Glaxo's preferred measure, fell 4% to £ 1.35 billion, slightly higher than analysts' estimates of £ 1.34 billion. Stripping out the effect of the strong pound, revenue rose 7% and core operating profit increased by 3%.

Glaxo shares jumped about 3% after the release of the results.

Glaxo has become a lower-margin company following its $20 billion asset swap with Novartis, in which it traded its highly profitable oncology franchise for the Swiss company's vaccines business, which has slimmer margins. The pair also formed a joint venture, controlled by Glaxo, for their over-the-counter medicines, which also have lower margins than prescription pharmaceuticals.

Glaxo did the deal because it believes it will be better off in the long run with low-margin but high-demand vaccines than with high-margin but low-demand cancer drugs, especially as powerful drug buyers put downward pressure on prices.

Write to Denise Roland at Denise.Roland@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


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