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STOCKS NEWS EUROPE-GSK weak as Q2 results miss forecasts
July 25, 2012 / 1:05 PM / 5 years ago

STOCKS NEWS EUROPE-GSK weak as Q2 results miss forecasts

Shares in GlaxoSmithKline (GSK) fall 1.4 percent, with the drugmakers the biggest negative weight on a 0.4 percent firmer FTSE 100 index, as the group warns that sales in 2012 will be flat and posts below-forecast second-quarter results.

GSK’s turnover fell 4 percent from the same period a year ago to 6.46 billion pounds, generating “core” earnings per share (EPS) down 5 percent at 26.4 pence.

Analysts, on average, had forecast sales of 6.70 billion pounds and core EPS of 27.4p, according to Thomson Reuters I/B/E/S.

“Overall, a slightly disappointing quarter for GSK with a slight miss both on revenues and EPS, but this is not very unexpected - GSK had clearly been signaling a weaker Q2 was likely. The longer-term growth with GSK continues to look comparatively good,” Bernstein Research says in a note.

The brokerage retains its “market-perform” rating on GSK with a price target of 1,588 pence.

“The company has a comparatively robust revenue and EPS profile through 2015 - without having had to do a major pharma merger lately - but its valuation seems to reflect this already, and this is our only real apprehension with the name,” Bernstein adds.

Peer AstraZeneca, which will report its second-quarter numbers on Thursday, fell 0.7 percent, while the other blue chip drugmaker Shire, which posts its results next Wednesday, shed 1.1 percent.

To see more on GSK’s results, please click on

Reuters messaging rm://jon.hopkins.thomsonreuters.com@reuters.net

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