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How Did GlaxoSmithKline’s Segments Perform in 2Q17?

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Aug. 31 2017, Published 11:34 a.m. ET

GlaxoSmithKline’s business segments

As we discussed earlier, GlaxoSmithKline’s (GSK) business is divided into three business segments:

  • Pharmaceuticals segment
  • Vaccines segment
  • Consumer Healthcare segment

The above chart shows the segment-wise revenues for GlaxoSmithKline in the last few quarters. For 2Q17, the company reported revenues of 7.32 billion pounds—3% growth in its revenues at constant exchange rates compared to 2Q16. The growth was driven by increased revenues across all three segments.

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Performance of business segments  

The Pharmaceuticals segment reported revenues of 4.36 billion pounds during 2Q17—12% growth compared to 2Q16. The growth was driven by a strong performance from new products including Relvar/Breo Ellipta, Tivicay, and Triumeq. The growth was partially offset by the impact of recent divestitures. In 2Q17, the Pharmaceuticals segment’s revenues included 3% growth in operating revenues and a 9% positive impact from foreign exchange.

The Vaccines segment reported revenues of 1.11 billion pounds during 2Q17—16% growth compared to 2Q16. The growth was driven by a strong performance from established vaccines and meningitis vaccines during 2Q17. In 2Q17, the Vaccines segment’s revenues included 5% growth in operating revenues and an 11% positive impact from foreign exchange.

The Consumer Healthcare segment reported revenues of 1.85 billion pounds during 2Q17—10% growth compared to 2Q16. The growth was driven by a strong performance from oral health and pain relief products. In 2Q17, the Consumer Healthcare segment’s revenues included flat operating revenue and a 10% positive impact from foreign exchange.

To divest company-specific risks, investors can consider ETFs like the Vanguard FTSE Developed Markets ETF (VEA), which holds 0.5% of its total assets in GlaxoSmithKline. VEA also holds 0.5% in Sanofi (SNY), 1.1% in Novartis AG (NVS), and 0.4% in Novo Nordisk (NVO).

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