GSK lifts full-year guidance as Q3 profit more than doubles

GSK plc reported a robust third quarter, with total sales climbing 7% to £8.5 billion, propelled by double-digit growth in its Specialty Medicines and Vaccines divisions, which drove an 11% increase in core operating profit and a 14% rise in core earnings per share. This strong performance led the biopharmaceutical company to upgrade its full-year 2025 guidance, now projecting turnover growth of 6-7% and core EPS growth of 10-12%, citing sustained momentum and significant R&D advancements.

Analysis

GSK plc reported robust third-quarter results, with total sales reaching £8.5 billion, marking a 7% increase at actual exchange rates. Core operating profit rose 11%, and core EPS increased 14% to 55 pence, significantly driven by double-digit growth in Specialty Medicines (up 16% to £3.4 billion) and strong vaccine performance, particularly Arexvy (up 36% to £251 million) and Shingrix (up 13% to £830 million). The company's total operating profit more than doubled year-over-year, benefiting from lower legal expenses and reduced contingent consideration charges.

This strong performance led GSK to upgrade its full-year 2025 guidance, now forecasting turnover growth between 6% and 7% and core EPS growth of 10% to 12% at constant exchange rates, significantly above previous forecasts of 3-5% and 6-8% respectively. CEO Emma Walmsley highlighted sustained momentum and significant R&D progress, including four FDA product approvals in 2025, underscoring the company's robust pipeline and future growth potential.

GSK demonstrated strong financial health, generating £2.5 billion in cash from operations and £1.2 billion in free cash flow during the quarter. The company continues its commitment to shareholder returns, declaring a 16 pence per share dividend and executing £1.1 billion in share repurchases as part of its £2 billion program, reflecting a strongly positive sentiment (0.85) and significant market impact (0.7) for the company.

Key Decisions for Investors

• Evaluate the sustainability of GSK's double-digit growth in Specialty Medicines and Vaccines, particularly the commercial ramp-up of key products like Arexvy, against the upgraded 2025 guidance.
• Monitor the ongoing success of GSK's R&D pipeline, including the commercialization of recently approved products and the progress of late-stage assets, as a key driver for future revenue growth.
• Factor in GSK's robust capital allocation strategy, evidenced by consistent dividend payments and the ongoing share repurchase program, when assessing total shareholder return potential.
• Observe the impact of the upcoming CEO transition on GSK's strategic direction and operational execution, despite the positive framing in the current report.