Wednesday preview: GSK reports fourth quarter earnings

GlaxoSmithKline on Wednesday reports its fourth quarter earnings and a trading update on its 2015 full year results.

UBS expects the pharmaceutical giant to report fourth quarter sales of £6.2m and core operating profit of £1.6bn. Core earnings per share (EPS) is forecast to come to 17.6p in the final three months of the financial year while annual EPS is estimated at 75.2p.

“We expect GSK to reiterate the 2016 outlook issued in May 2015 of reaching double-digit core EPS growth in 216,” said analyst Alexandra Hauber.

“In view of solid growth from ViiV, a stabilising respiratory business and merger cost synergies in Consumer and Vaccines (we assume 4pp contribution to 2016 core EPS growth from incremental merger synergies of £225m) mid-teens core EPS growth seems achievable (UBS estimate is 15%), though we expect to keep a cautious stance in the year.”

Deutsche Bank predicted 6% full year sales growth at constant exchange rates (CER) and a 15% CER EPS decline. The bank increased its EPS forecasts by 1-4%, reflecting the benefits of a weaker pound and the recent HIV pipeline acquisition from Bristol-Myer’s Squibb. GSK's HIV business, ViiV Healthcare, has reached two separate agreements with Bristol-Myers Squibb, to acquire its late-stage HIV research and development assets.

“We continue to see GSK’s shares as modestly undervalued and see room for a near-term rally as management delivers on near term earnings and margin targets,” Deutsche Bank analyst Richard Parkes said.

Wednesday 03 February

INTERIM DIVIDEND PAYMENT DATE
Ashtead Group, Vodafone Group

Q4
Public Joint Stock Company Severstal GDR (Reg S), Torchmark Corp.

FINALS
Public Joint Stock Company Severstal GDR (Reg S)

AGMS
Artemis VCT, Conygar Investment Company, Conygar ZDP , Dunedin Smaller Companies Inv Trust, Future, Redhall Group

FINAL DIVIDEND PAYMENT DATE
Aberdeen Asset Management, Focusrite