Key Takeaways
- First-quarter core earnings per share reached 46.5p, surpassing the 43.5p consensus forecast
- Legal settlement provisions accounted for approximately half of the earnings outperformance
- Shingrix vaccine revenue climbed 20% to £1.0 billion; Arexvy RSV vaccine declined 18%
- Full-year outlook remained unchanged despite increasing currency headwinds from Sterling strength
- Shares declined approximately 3% following the earnings announcement
GSK delivered first-quarter earnings that exceeded analyst projections on Wednesday, yet the market reaction proved lukewarm. Shares fell roughly 3% in morning trading as investors scrutinized the underlying drivers.
Core operating profit for the quarter ending March 31 increased 10% on a constant currency basis to £2.65 billion, surpassing the company-compiled analyst consensus of £2.46 billion. Core earnings per share reached 46.5 pence, representing a 9% year-over-year increase and exceeding the 43.5 pence forecast.
Analysts at Jefferies immediately highlighted that legal settlement provisions contributed roughly half of the earnings surprise rather than operational performance improvements. “Core Operating Income and Core EPS both 7% ahead of consensus, but c50% of that driven by legal settlement provisions,” the firm noted.
Revenue increased 5% at constant exchange rates to £7.6 billion, aligning with analyst expectations. While representing steady performance, the figure failed to generate significant investor enthusiasm.
Performance Breakdown Across Segments
The Specialty Medicines division delivered the strongest results, advancing 14% to £3.2 billion. HIV therapy sales reached £1.8 billion, marking a 10% gain. The respiratory, immunology, and oncology portfolio expanded 28% to £0.5 billion, albeit from a smaller revenue base.
Vaccine sales totaled £2.1 billion, reflecting 4% growth. Shingrix, the company’s shingles prevention vaccine, emerged as the clear winner—revenue surged 20% to reach a record £1.0 billion. Meanwhile, Arexvy RSV vaccine sales dropped 18% to £0.1 billion, which management attributed to seasonal demand fluctuations.
General Medicines represented the underperforming segment, falling 6% to £2.3 billion and trailing analyst projections by 3%.
Full-Year Outlook Unchanged Amid FX Pressures
Management maintained its 2026 financial targets, continuing to project revenue growth of 3% to 5% alongside core operating profit expansion of 7% to 9%.
Sterling’s appreciation against the U.S. dollar, however, is pressuring reported results. Jefferies observed that the foreign exchange impact is pushing consensus forecasts toward the high end of management’s guidance range.
GSK also revealed modifications to its investor relations schedule. CEO Emma Walmsley and newly appointed commercial head Luke Miels will present a comprehensive strategy update concurrent with second-quarter results, replacing a previously scheduled HIV-focused event.
The board approved a first-quarter dividend payment of 15 pence per share.
GSK shares have gained 42% over the trailing twelve months, outperforming both the FTSE 100 index and the wider Stoxx 600 benchmark.
