GlaxoSmithKline plc (GSK - Free Report), one of the largest healthcare companies, reshaped its business following the Mar 2015 completion of the three-part, inter-conditional transaction with Novartis related to its Consumer Healthcare, Vaccines and Oncology businesses. Under the deal, Glaxo sold its oncology assets to Novartis and acquired Novartis’ Vaccines business (excluding influenza vaccines). Additionally, the companies created a joint venture (JV), thereby combining their consumer divisions to form a larger consumer healthcare business.

Following the completion of the deal, the UK-based company now focuses on its three core businesses – Pharmaceuticals (respiratory, HIV), Vaccines (pediatric, adolescent, adult, and travel vaccines) and Consumer Healthcare (wellness, oral health, nutrition and skin health products).

However, like many of its peers, Glaxo is facing challenges in the form of stiff competition, genericization, pricing pressure and slowing growth in emerging markets in this scenario, investor focus remains on late-stage pipeline candidates and their commercial potential, restructuring and cost-cutting initiatives and performance of new products apart from the usual top-and bottom-line numbers.

Glaxo’s performance has been pretty good so far, with the company’s earnings beating expectations thrice in the trailing four quarters while posted in-line results in another. Overall, the company has delivered an average positive surprise of 2.12%.

Currently, Glaxo has a Zacks Rank #3 (Hold), but that could definitely change following the company’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:

Earnings Miss: Glaxo reported core earnings of 68 cents per American depositary share, which miss our consensus estimate of 70 cents.

Revenues Miss: Revenues were up 4% year over year at the constant exchange rate (CER) to $10 billion (£7.2 billion). Revenues also missed Zacks Consensus Estimate of $10.3 billion.

Key Stats: While sales in Consumer Healthcare and Pharmaceuticals were up 2%, the Vaccines segment increased 13% at CER.

2018 Guidance: Glaxo continues to expect EPS growth of 4-7% at CER in 2018 if no Advair generics are launched this year. However, in the event of introduction of Advair generic in the U.S. market by mid-year, Glaxo expects adjusted EPS to be flat to down 3% year over year at CER.

Share Price Impact: Shares declined almost 3% in pre-market trading.

GlaxoSmithKline plc Price and EPS Surprise

GlaxoSmithKline plc Price and EPS Surprise | GlaxoSmithKline plc Quote