Wednesday preview: GlaxoSmithKline to report difficult quarter, analysts say
Healthcare giant GlaxoSmithKline is expected to report 'another difficult quarter' when the company unveils its latest results Wednesday, according to analysts.
Healthcare giant GlaxoSmithKline is expected to report 'another difficult quarter' when the company unveils its latest results Wednesday, according to analysts.
The pharmaceuticals group will post its full-year and fourth quarter financials, a day after announcing it increased its stake in its Indian consumer healthcare subsidiary by investing more than half a billion pounds in the unit.
"We expect another difficult quarter as the company experiences some tough [year on year] comparisons [Advair & Cervarix], EU austerity and a forex headwind," analysts at Credit Suisse said.
The broker expects a 3.0% fall in sales and 4.0% decline in earnings per share (EPS) in the fourth quarter.
About £50m of incremental vaccine tenders will offset some of the negatives in the quarter but many of the headwinds look set to continue into early 2013 including its products Cervarix, Vesicare, Lamictal XR, it added.
Credit Suisse said a solid dividend yield of circa 5.0% will remain an attraction for the stock along with a free cash flow generation of circa £5.0bn per annum.
"We forecast an ongoing £2.0bn per annum share buyback programme to double operational EPS growth of 3-6% [2012-16 compound annual growth rate]. However, we see limited opportunity for this to improve in the near term, in the absence of significant top line growth."
Shares were down 0.91% to €5.57 at 16:02.
GlaxoSmithKline is not to be outshone by fellow FTSE 100 firms TUI Travel and Hargreaves Lansdown which also release latest trading results on Wednesday.
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