The Gory Details on GlaxoSmithKline's Double Miss (GSK)

The Gory Details on GlaxoSmithKline's Double Miss

GlaxoSmithKline (NYSE: GSK ) reported earnings on Oct. 31. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), GlaxoSmithKline missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue dropped and GAAP earnings per share dropped significantly.

Margins dropped across the board.

Revenue details
GlaxoSmithKline reported revenue of $10.52 billion. The 11 analysts polled by S&P Capital IQ predicted sales of $10.81 billion on the same basis. GAAP reported sales were 5.3% lower than the prior-year quarter's $11.11 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.84. The two earnings estimates compiled by S&P Capital IQ forecast $0.92 per share. GAAP EPS of $0.36 for Q3 were 16% lower than the prior-year quarter's $0.43 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 68.1%, 410 basis points worse than the prior-year quarter. Operating margin was 25.7%, 500 basis points worse than the prior-year quarter. Net margin was 17.2%, 220 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $11.15 billion. On the bottom line, the average EPS estimate is $1.04.

Next year's average estimate for revenue is $43.39 billion. The average EPS estimate is $3.67.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 31 members out of 35 rating the stock outperform, and four members rating it underperform. Among three CAPS All-Star picks (recommendations by the highest-ranked CAPS members), three give GlaxoSmithKline a green thumbs-up, and give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on GlaxoSmithKline is outperform, with an average price target of $47.84.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of GlaxoSmithKline. Motley Fool newsletter services recommend GlaxoSmithKline. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy

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