GSK ‘delivers disappointment’

GlaxoSmithKline (GSK) has reportedly delivered disappointing figures in its recent management comments, it has been claimed.

Hemscott reports that the company has guided for a mid-digit decline in earnings per share when measured at constant exchange rates, with an implied figure of around 97 pence, below common forecasts of around 101 pence.

This has been ascribed to two pressures on sales, with major drugs losing patent protection and sales of Avandia (rosiglitazone) falling among safety concerns.

Merrill Lynch said: “Although we had been concerned that the margin dilution from loss of patents on major products in 2008 would more than offset restructuring announced in October 2007, the weak guidance suggests even greater operational deleveraging than we had anticipated.”

Deustche Bank added that the company’s growth outlook is slow with an increasing reliance on asthma drug Advair (fluticasone and salmeterol), whose performance is “sluggish” in the US, with the bank giving a “hold” rating to stock in the firm.

In April 2007, GSK announced what it described as “very encouraging” financial results for the first quarter of the 2007 fiscal year, with a four per cent reduction in turnover to 5.6 million pounds compared to the first quarter of 2007.