GlaxoSmithKline's 7% sales growth and 18% EPS rise in line with expectations

The world's second-largest drugmaker by sales, GlaxoSmithKline, has posted a strong set of results for 2005, showing turnover up 7% at L21.66 billion ($37.92 billion), pretax profits 13% higher at L6.73 billion, net earnings 17% stronger at L4.82 billion and with earnings per share rising 18% to 82.60 pence. The figures, all at contant exchange rates, were in line with, or ahead of some, consensus analysts' expectations, and the company's share price, after starting the trading day lower, shares rose 0.3% to L14.48 after the results announcement on February 8. GSK is one of the least expensive European Union drug majors, say analysts at Lehman Brothers, rating the stock as a 1-overweight.

The fourth quarter, however, showed even better results, with sales up 10% at L5.91 billion, pretax earnings of L1.61 billion (+11%), net earnings of L1.15 billion (+31%) and EPS 33% higher at 19.6 pence on a year-on-year comparison.

Chief executive Jean-Pierre Garnier said it was "a great year on several counts." All key products performed well and the company made significant progress with its R&D pipeline, and it was the best financial growth GSK has experience since the merger of Glaxo Wellcome and SmithKline Beecham, he told a results press conference. Moreover, the last quarter was particularly strong, he said, noting that this is quite an achievement for a company of its size.