GlaxoSmithKline(LSE: GSK) (NYSE: GSK.US) has surprised the market today by reporting third-quarter results that exceeded analyst expectations.Specifically, the company reported third-quarter profit of 1.89bn, or 27.9p per share. Analysts were expecting earnings of 24.p per share for the quarter.
Alongside todays results, Glaxo also announced a number of measures designed to improve the companys profitability and rate of growth.
For example, the company is planning to cut 1bn of expenses over the next three years,with half of the savings to come in 2016. Additionally,Glaxo has decided to explore the option of an initial public offering of Viiv Healthcare, a joint venture between Glaxo andsector giant Pfizerthatdesigns and developsHIV drugs.
Still, todays update from Glaxo did contain some bad news. Sales for the quarter declined to 5.7bn, from 6.5bn as reported during the same period last year.
Theres no denying that 2014 has been a tough year for Glaxo. Indeed, the company was fined 297m last month after a 15-month investigation, which found the company guilty ofbribing doctors within China.
Glaxo remains under investigation by regulators within in both the UK and US. But still, the conclusion of this investigation has removed much uncertainty surrounding the groups future, uncertainty which has dragged on Glaxos share price. The companys shares have underperformed the FTSE 100 by more than 10% so far this year.
Nevertheless, Glaxos management has been busy while the market has been fretting about the Chinese scandal.
In particular, as part of managements strategy to turn Glaxos fortunes around, the company signed a deal withNovartis earlier this year, which will seeGlaxo take control aworld-leading vaccine and consumer health business. As part of this deal, Glaxo is returning 4bn to investors.
Further, the deal with Novartis is not the only transaction Glaxos management has undertaken to boost growth. The company recently acquired a 25% stakein the Japanese subsidiary ofAspen Pharmacare,as part of an alliance to boost commercial operations within the Asian country.
The world is watching
Glaxos third-quarter results were the main event of today, but alongside the results Glaxos management made a big announcement that caught the attention of many media outlets around the world.
Glaxo now expects to have the first doses of its Ebola vaccine ready later this year and the company is looking to work with peers in order to get production off the ground. PeerJohnson & Johnsonhad previously said that a vaccine would not be available in the required quantities until 2015. It seems as if Glaxo has now torn up this timetable.
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Rupert Hargreaves owns shares of GlaxoSmithKline. The Motley Fool UK has recommended GlaxoSmithKline. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.