- Q2 earnings beat
- Raised full year guidance
- Improved operational performance
GSK (GSK) delivered better than expected earnings for the second quarter to 30 June and raised sales and profit guidance to the top end of the range, driven by continued strength in specialty medicines and an improved operating performance.
The shares added 10p or 0.7% to £14.07, taking year-to-date gains to 3% compared with a 10% advance in the FTSE 100 index.
CEO Emma Walmsley commented: ‘GSK’s strong momentum in 2025 continues with another quarter of excellent performance driven mainly by Specialty Medicines, our largest business, with double-digit sales growth in Respiratory, Immunology & Inflammation, Oncology and HIV.’
Walmsley noted the achievement of three major FDA (Food and Drug Administration) approvals this year and 16 assets in late-stage development.
‘With all this, we now expect to be towards the top end of our financial guidance for 2025 and remain confident in our long-term outlooks’, added Walmsley.
As a reminder, the company-guided range is 3% to 5% growth in revenue and core operating profit and EPS (earnings per share) growth in a range of 6% to 8%.
EARNINGS BEAT
Revenue increased 6% in constant currencies to nearly £8 billion while core operating earnings and EPS grew 12% and 15% respectively, coming in ahead of consensus analysts’ forecasts.
Specialty medicines grew mid double-digit driven by a 42% increase in oncology and 12% increase in HIV. Vaccines contributed 9% growth supported by better-than-expected sales of shingles vaccine Shingrix.
The core operating profit margin expanded by 1.1% to 32.9% driven by improved sales mix and continued operating efficiencies. GSK said it anticipates further progress from operating leverage and a ‘returns-based’ approach to operating investments.
Shore Capital’s Sean Conroy noted higher foreign exchange headwinds and consequently anticipates making a 1% to 2% downgrade to his 2025 revenue and core operating profit forecast.
‘GSK shares continue to remain at a disproportionate discount relative to peers as it has struggled to convince the market that it can grow through forthcoming HIV patent expiries,’ said Conroy.
