Analysts Expect GSK's Third-Quarter Sales to Rise Under New Plan

what happened

U.K. drugmaker GSK is scheduled to report third-quarter results on Wednesday. According to a consensus compiled by the company and cited by Earnings Preview, turnover is expected at 8.84 billion pounds ($11.79 billion), up from 8.55 billion pounds a year earlier. Core operating profit is forecast at 2.93 billion pounds, slightly below the 2.99 billion pounds reported for the same period last year.

GSK shares fell 7.5% during the third quarter but have gained about 5% year to date through Monday's close. Investors will focus on full-year guidance: the company has forecast turnover growth of 3% to 5% and core operating profit and earnings per share growth of 7% to 9%, excluding currency movements. Under its new strategy, GSK plans to cut costs by 1.9 billion pounds by 2029.

why it matters

Earnings growth is expected to be weighted toward the fourth quarter, so the annual outlook matters more than the quarterly figures. UBS and J.P. Morgan analysts expect GSK to keep turnover and core operating profit guidance in the upper half of its ranges and core EPS in the lower half. Investors will also watch how the new strategy and cost-savings plan perform in practice.

market impact

GSK and UK pharma: full-year guidance will set sentiment for the stock and the sector

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