All Systems Go at GlaxoSmithKline: Fool by Numbers

On Feb. 8, GlaxoSmithKline (NYSE: GSK  ) released fourth-quarter earnings for the period ended Dec. 31.

• Sales grew 12.3%, led by strong performance from drugs like Avandia and Coreg.
• Glaxo plans to introduce five new drugs for fiscal 2007, including drugs for important markets like cardiovascular disease, breast cancer, and cervical cancer.
• Fiscal 2007 is expected to be challenging for GSK, as its major drugs, Zofran and Wellbutrin XL, are going to face competition from generic variants.
• The company has received approval from the U.S. Food and Drug Administration for its over-the-counter weight-loss drug, Alli. This is the first weight-loss drug approved by the FDA for use without a prescription.
• The company expects EPS to grow by 8%-10% this year, at constant exchange rates.

(Figures in millions, except per-share data)

Income Statement Highlights

	Q4 2006	Q4 2005	Change
Sales	$11,542	$10,153	13.7%
Net Profit	$2,359	$1,929	22.3%
EPS	$0.41	$0.34	20.6%
Diluted Shares	5,669	5,710	0.7%

Get back to basics with a look at the income statement.

Margin Checkup

	Q4 2006	Q4 2005	Change*
Gross Margin	75.9%	78.0%	(2.1)
Operating Margin	28.8%	27.4%	1.4
Net Margin	20.4%	19.3%	1.1

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q4 2006	Q4 2005	Change
Cash + ST Invest.	$5,959	$8,996	(33.8%)
Accounts Rec.	$10,421	$7,578	37.5%
Inventory	$4,776	$3,742	27.6%

Liabilities	Q4 2006	Q4 2005	Change
Accounts Payable	$9,547	$1,408	578.1%
Long-Term Debt	$9,353	$9,060	3.2%

Learn the ways of the balance sheet.

Cash Flow Highlights

	Q4 2006	Q4 2005	Change
Cash From Ops.	$3,775	$2,976	26.8%
Capital Expenditures	$912	$602	51.5%
Free Cash Flow	$2,863	$2,374	20.6%

Find out why Fools always follow the money.

Related Companies:

• AstraZeneca (NYSE: AZN  )
• Sanofi-Aventis (NYSE: SNY  )
• Novartis (NYSE: NVS  )
• Johnson & Johnson (NYSE: JNJ  )
• Pfizer (NYSE: PFE  )

Related Foolishness:

• Glaxo's Prescription for Sagging Sales
• Merck's Special Interest
• The Best Drug Stock for 2007: GlaxoSmithKline

Pfizer is a Motley Fool Inside Value recommendation. Johnson & Johnson and GlaxoSmithKline are Motley Fool Income Investor selections.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.