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GSK’s 2Q17 Earnings: Consumer Healthcare

Mike Benson - Author

Aug. 2 2017, Updated 10:37 a.m. ET

Consumer Healthcare segment

Over the last few years, GlaxoSmithKline (GSK) has made improvements in its supply chain. GSK has launched new products in order to strengthen its Consumer Healthcare segment.

The chart below shows the revenues for GSK’s Consumer Healthcare segment since 3Q15. The Consumer Healthcare segment reported nearly flat revenues at constant exchange rates to ~1.9 billion pounds during 2Q17, following the strong performance of oral health and pain relief drugs. Its revenues were offset by lower sales of allergy products in the US markets.

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Consumer Healthcare performance

For the US markets, GSK’s Consumer Healthcare segment reported a decline of 8.0% at constant exchange rates to 430.0 million pounds during 2Q17. This decline followed a weak performance by the Allergy Products portfolio in the US markets.

For the European markets, the Consumer Healthcare segment reported growth of 7% at constant exchange rates to 579.0 million pounds during 2Q17. This growth was driven by strong performance of Sensodyne oral health products and the pain relief product Voltaren.

GlaxoSmithKline (GSK) reported flat international revenues at constant exchange rates to 843.0 million pounds during 2Q17. The performance in international markets was due to softer sales in the major categories.

The overall sales from new Consumer Healthcare products launched within the last three years reported a growth in revenues during 2Q17. These products contribute ~12.0% of total revenues for the Consumer Healthcare segment.

During 2Q17, GSK launched new products such as Flonase OTC, Sensodyne Rapid, and Pronamel Strong & Bright.

To diversify any company-specific risks, investors can consider the BLDRS Developed Market 100 ADR ETF (ADRD), which holds 2.5% of its total assets in GlaxoSmithKline. ADRD also holds 5.5% of its total assets in Novartis (NVS), 2.7% in Sanofi (SNY), and 1.9% in AstraZeneca (AZN).


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