GSK 'absorbs' reform costs in strong Q1

Another round of earnings reports today, and this time, they're mostly good. GlaxoSmithKline, Hospira and Merck KGaA all posted Street-beating earnings, while pharmacy benefits manager Medco Health Solutions reported an increase in profits. Here are the highlights:

  • GSK's (NYSE: GSK) net income grew by 19 percent to 1.34 billion pounds, or $2.04 billion. Sales of the H1N1 flu vaccine helped lift revenues to 7.36 billion pounds, or $11.1 billion, an increase of 13 percent. Emerging markets sales were up 43 percent and Asian sales up 45 percent, helping to offset a 1 percent decline in U.S. sales. Interestingly, the company said it was able to "absorb" the cost of U.S. healthcare reform during the first quarter, and that it hopes to offset future reform-related costs with "continued operational performance." Release | Report

  • Medco (NYSE: MHS) saw Q1 profit and sales grow by 10 percent to $320.5 million and $16.3 billion, respectively. The company said it started doing business with several large new clients, boosting its numbers. Also aiding results: Higher prices on branded drugs and higher sales of cheaper, higher-margin generics. Release | Report

  • Merck KGaA's strong results depended largely on the chemicals side of the business, though sales in its Merck Serono drug unit rose 7 percent to €1.41 billion, or $1.86 billion. Revenues were boosted by a 17 percent surge in revenue from the Rebif treatment for multiple sclerosis, which rose to €429 million, mostly because Merck shipped an extra 20 days' supply to U.S. wholesalers in March. Report

  • Hospira (NYSE: HSP) posted a stronger-than-expected first-quarter profit, helped by sales of a generic cancer drug and other specialty injectables. But it warned that voluntary product shipment halts--related in part to manufacturing problems with the anesthesia med propofol--would hold back full-year results. Report