=GlaxoSmithKline (GSK) reported earnings on Wed 26 July 2017 (b/o)

GlaxoSmithKline beats by GBP 0.01, reports revs in-line; issues guidance:

• Reports Q2 (Jun) earnings of GBP0.27 per share, excluding non-recurring items, GBP0.01 better than the Capital IQ Consensus of GBP0.26; revenues rose 12.1% year/year to GBP7.32 bln vs the GBP7.27 bln Capital IQ Consensus. 
• The utilisation of the Priority Review Voucher, together with other accelerated launch costs for the HIV two drug regimen, has impacted GSK's previous expectations for growth in Adjusted EPS by around two percentage points. With no Advair generic expected in the US in 2017, GSK now expects 2017 Adjusted EPS growth to be 3% to 5% CER. If exchange rates were to hold at the closing rates on 30 June 2017 ($1.30/1, 1.14/1 and Yen 146/1) for the rest of 2017, the estimated positive impact on full-year 2017 Sterling turnover growth would be around 5% and if exchange losses were recognised at the same level as in 2016, the estimated positive impact on 2017 Sterling Adjusted EPS growth would be around 8%.
• GSK expects sales to grow at CER at a low-to-mid single digits percentage CAGR and Adjusted EPS to grow at a mid-to-high single digits percentage CAGR for the period 2016-2020. These outlooks are based on 2015 exchange rates and anticipate that at least one version of generic Advair will be launched in the US before 2020. The outlook includes the divestments announced today and those executed since 2015 (0.9 billion in annual sales).
• The Board intends to maintain the dividend for 2018 at the current level of 80p per share, subject to any material change in the external environment or performance expectations. Over time, as free cash flow strengthens, it intends to build free cash flow cover of the annual dividend to a target range of 1.25-1.50x, before returning the dividend to growth.