GSK GSK plc

By Carlo Martuscelli

GlaxoSmithKline PLC (GSK.LN) reported full-year and fourth-quarter results Wednesday. Here is what you need to know:

SALES: The British pharmaceutical major reported sales of 8.90 billion pounds ($11.58 billion), up 8.6% on last year but behind analyst forecasts of GBP9.03 billion as provided by FactSet.

ADJUSTED EPS: Adjusted earnings per share--a metric closely watched by analysts that strips out one-off items--fell by 16% at constant currency to 24.8 pence, below consensus forecasts of 30 pence.

WHAT WE WATCHED:

-DIVIDEND: Investors will be relieved to know that their dividend in 2020 is safe. The company announced it was targeting another year of unchanged payout at 80 pence a share.

However, the horizon beyond the consumer-health separation remains unclear. Over-the-counter products might lack the high margins of successful innovative drugs but they represent steady cash flow with which to prop up the dividend. It remains to be seen if it can be maintained once this is removed--and the company is entirely dependent on the boom-and-bust of clinical breakthroughs and patent expiries.

-CONSUMER JV: The FTSE 100-listed drug maker confirmed it was targeting 2022 as the separation date for its consumer-health business. Chief Executive Emma Walmsley said in a call that the timeline for the joint venture with Pfizer Inc. (PFE) was unchanged. She also said an eventual spinoff continued to be expected.

Write to Carlo Martuscelli at carlo.martuscelli@wsj.com; @carlomartu

(END) Dow Jones Newswires

February 05, 2020 09:43 ET (14:43 GMT)

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