GSK Plc (NYSE:GSK) stock rose Tuesday after the British drugmaker reported better-than-expected second-quarter results.
Launches $2.52 Billion Cost-Savings Program
GSK said its new Accelerate Growth program targets 1.9 billion pounds ($2.52 billion) in annual savings by 2029, with expected implementation costs of 2.4 billion pounds.
The company said most of the savings will be reinvested to support growth, while a portion will be used to improve margins and profitability during the dolutegravir loss-of-exclusivity period from 2028 through 2030.
“We believe these plans, together with continued disciplined capital allocation, will drive strong operational performance and shareholder returns over the next five years, delivering our 2031 sales outlook and accelerated long-term growth,” CEO Luke Miels said.
Reuters reported that GSK’s new cost-savings program is intended to reassure investors that the British drugmaker can manage the expected patent expiry of its blockbuster HIV drug dolutegravir.
GSK Beats Earnings And Revenue Estimates
GSK reported adjusted earnings of $1.35 per share (50.5 pence), beating the analyst consensus estimate of $1.27.
Revenue increased 5% year over year to $11.28 billion (8.41 billion pounds), exceeding the consensus estimate of $10.79 billion, according to Benzinga Pro.
Specialty medicines revenue rose 14% to 3.78 billion pounds. HIV sales increased 11% to 2.08 billion pounds, or 10% at constant currency.
Vaccine sales grew 9% to 2.28 billion pounds, driven by higher sales of Arexvy, meningitis vaccines and Shingrix.
Shingrix revenue increased 4% to 888 million pounds, supported by stronger demand in Europe, partly offset by weaker international sales. U.S. sales were broadly unchanged as favorable pricing offset lower demand and channel inventory utilization.
Meningitis vaccine sales climbed 22% to 462 million pounds, while Arexvy generated 192 million pounds in sales.
General medicines revenue declined 9% to 2.34 billion pounds.
GSK Sees Higher End Of 2026 Guidance
GSK expects 2026 sales and core operating profit growth to reach the upper halves of its guidance ranges. However, it expects core earnings per share growth in the lower half of its range.
The company continues to forecast sales growth of 3% to 5%. It also expects core operating profit and core EPS to grow 7% to 9%.
GSK reaffirmed its outlook for specialty medicines sales to grow at a low double-digit rate.
The company raised its vaccines outlook. It now expects sales to range from broadly stable to low single-digit growth. Previously, it forecast a low single-digit decline to broadly stable sales.
However, GSK lowered its outlook for General Medicines. It now expects sales to decline by a low- to mid-single-digit percentage. Its previous guidance called for a low single-digit decline to broadly stable sales.
GSK Price Action: GSK shares were up 3.81% at $53.96 at the time of publication on Tuesday, according to Benzinga Pro data.
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