Better margins and new drugs keep GlaxoSmithKline on track

[April 27, 2016]  LONDON (Reuters) - Improving margins in consumer health and growing demand for new drugs helped lift GlaxoSmithKline's underlying earnings a better-than-expected 14 percent in the first quarter, keeping it on course to achieve a promised return to growth in 2016.

The British drugmaker, which is seeking a new chief executive to replace Andrew Witty in 2017, said on Wednesday that demand for recently launched respiratory and HIV medicines had offset falling sales of aging lung treatment Advair.

Sales, in sterling terms, rose 11 percent to 6.23 billion pounds ($9.10 billion) in the three months to March, generating core earnings per share (EPS) of 19.8 pence.

Analysts, on average, had forecast sales of 6.01 billion pounds and core EPS, which excludes certain items, of 17.9p, according to Thomson Reuters.

GSK said it expected 10 to 12 percentage growth in 2016 core EPS at constant currencies and confirmed that the dividend, one of the stock's main attractions with a yield of nearly 6 percent, would be held steady through 2017.

($1 = 0.6846 pounds)

(Reporting by Ben Hirschler)

[© 2016 Thomson Reuters. All rights reserved.]

Copyright 2016 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.