GlaxoSmithKline plc (LON:GSK) saw its shares retreat furtehr in the afternoon even though the drugmaker said it remains on track to deliver its financial targets for 2017 under new boss Emma Walmsley as it reported slightly better than expected first-quarter results.
The FTSE 100-listed firm saw its adjusted earnings per share rise by 31% to 25.0p in the quarter to March 31, beating forecasts for 24.5p.
EPS was boosted by the weakness of sterling in the wake of last year's Brexit vote, with growth at constant exchange rates pegged back to 9%.
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The drugmaker’s sales were up 19% at actual exchange rates to £7.38bn, or 5% at constant exchange rates, also exceeding market forecast for £7.26bn.
Walmsley, who took over as Glaxo’s chief executive officer from Andrew Witty on April 1, said: "This is a positive start for the year with sales growth in all three of our businesses and an improvement in the group's operating margin."
She added: “Our clear focus is on commercial execution and preparation for near-term launches in Respiratory, HIV and Vaccines.”
Sales growth and improved operating margins across all Glaxo’s three businesses
Glaxo reported sales growth and improved operating margins across all its three business segments – Pharmaceuticals, Vaccines, and Consumer Health.
The firm also saw its net cash flow from operations more than double to £1.1bn, up from £0.5bn a year earlier.
The group said it will pay a 19p dividend for the first quarter and continues to expect make an 80p payout overall for full-year 2017.
Glaxo also maintained its guidance for 2017 adjusted earnings per share at constant exchange rates.
But by mid afternoon trading, Glaxo shares had fallen back to session lows after a slight rally, losing 1.4%, or 23p at 1,576p.
"We remain a little in limbo as far as the future of GSK is concerned", says analyst
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “Vaccines are the stand out performer this time round, particularly the new Bexsero meningitis B vaccine.
“In fact new drugs were good across the board. New respiratory drugs more than offsetting the decline in Advair sales will be particularly satisfying given the pain the loss of patent on that blockbuster has caused.”
“However,” he added, “we remain a little in limbo as far as the future of GSK is concerned.
“Sir Andrew Witty was with the pharmaceuticals giant for 32 years, but his replacement Emma Walmsley is a relative newbie to the world of pharma. Does new blood mean a new direction?
“Ms Walmsley may be seen as the heir to Sir Andrew, but she’s still likely to want to stamp her mark on the group. We will have to wait until the end of July to find out.”
-- Adds analyst comment, updates share price --