In first quarter results announced at midday today GlaxoSmithKline (LON: GSK) delivered sales of £7.7 billion a 6% increase over Quarter one 2018. The vast majority of the 6% growth came from the vaccines arm of the business which delivered an impressive 23% growth year on year, the consumer healthcare division remained flat and the pharmaceutical business delivered modest growth of 4%. With the vaccines division providing substantially higher operating margins than the other two divisions and the benefit of reduced tax rates post tax profits jumped by 30% to £985 milion, delivering an impressive 50% earnings per share increase to 16.8p.

The consumer healthcare business which contains well known consumer brands such as Sensodyne and Panadol was the big disappointment in the results with sales roughly flat coming in at £1.98 billion. The pharmaceutical business was a mixed bag with the two HIV drugs Triumeq and Tivicay delivering a 7% sales increase to £1.12 billion but this was largely offset by a 14% drop in Advair sales down to £486 million following the launch of a competitor.

Despite the quarterly rise in profits the company still expects earnings for the full year to fall between 5-9% from last year. A 19p quarterly dividend was announced and the board remained committed to delivering a full year dividend of 80p, a 5% yield on the current share price.

Commenting on the results Emma Walmsley, Chief Executive Officer said:

“We have made a strong start to 2019, which is an important year of execution for GSK, with growth in sales, operating margins and earnings per share in Q1, in line with our expectations. Strengthening our pipeline remains our number one priority and we reported positive data for several potential new medicines in HIV and Oncology during the quarter. I am also pleased to report that integration planning for our new proposed Consumer Healthcare business is going well and,subject to relevant approvals, we continue to expect to complete this transaction in the second half of the year. We look forward to building on the progress made this quarter.”

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