GlaxoSmithKline (LON:GSK) will take a big currency hit after sterling’s recent decline but upped its underlying earnings forecast for the year as sales rallied in all three divisions.
The underlying performance was strong in its latest quarter to June, said the pharma giant, with sales rising by 4% in constant currencies and 11% in sterling terms to £6.5bn.
Vaccine sales rose by 11% to £930mln, consumer products by 7% to £1.7bn and pharmaceuticals by 2% to £3.9bn with new vaccines and pharma products more than doubling their contribution at £1.05bn.
Glaxo will however post an interim loss of £318mln due to a US$1.8bn write-down of assets following sterling’s slide before and after the Brexit vote.
Before the currency hit, operating profits were 16% higher at £1.83bn or 24.5p per share.
With this momentum Glaxo said underlying earnings for the full year would be 11-12% higher, at the top of its guidance. If sterling stayed at teh current level, earnings would see a 19% uplift.
Earlier today, the pharma giant had announced it would invest £275mln into the UK post-Brexit to expand its manufacturing operations.
“The underlying attractiveness in terms of the UK's economic strengths and its fiscal environment haven't changed and that's why we feel very strongly that this investment makes sense," said chief executive Sir Andrew Witty.