Glaxo Swings to Loss on Write-Down But Core Earnings, Revenue Beat Expectations -- Update
27 July 2016 - 10:47PM
Dow Jones News
By Denise Roland
GlaxoSmithKline PLC posted a loss in the second quarter,
reflecting a GBP1.8 billion ($2.36 billion) write-down related to
the increased value of liabilities following the sharp drop in the
value of the pound triggered by Britain's vote to leave the
European Union.
At the same time, the company cheered investors by beating
market expectations for core earnings and revenue, sending shares
up 1.5%. Glaxo also narrowed its full-year guidance to the upper
end of earlier estimates. It now expects core earnings per share to
increase 11-12% in 2016, compared with 10-12% previously.
Core operating profit, a measure that strips out one-time losses
and gains, increased 36% to GBP1.8 billion, as revenue climbed 11%
to GBP6.5 billion, beating analyst forecasts of GBP6.3 billion.
Glaxo reports in pounds but makes most of its revenue outside
the U.K., meaning its reported revenue benefited from the sharp
drop in the value of the pound following the Brexit vote, a
currency move that also increased the value of Glaxo's liabilities.
Adjusting for currency, core operating profit climbed 15% and
revenue rose 4%.
The pharmaceutical giant posted a net loss of GBP435 million for
the three months to June 30, compared with GBP149 million net
profit reported a year earlier.
Write to Denise Roland at Denise.Roland@wsj.com
(END) Dow Jones Newswires
July 27, 2016 08:32 ET (12:32 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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