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 today’s results, Glaxo also announced a number of measures designed to improve the company’s 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 and sector giant Pfizer that designs and develops HIV drugs.
Still, today’s 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.
Tough year
There’s 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 of bribing 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 group’s future, uncertainty which has dragged on Glaxo’s share price. The company’s shares have underperformed the FTSE 100 by more than 10% so far this year.
Nevertheless, Glaxo’s management has been busy while the market has been fretting about the Chinese scandal.
In particular, as part of management’s strategy to turn Glaxo’s fortunes around, the company signed a deal with Novartis earlier this year, which will see Glaxo take control a world-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 Glaxo’s management has undertaken to boost growth. The company recently acquired a 25% stake in the Japanese subsidiary of Aspen Pharmacare, as part of an alliance to boost commercial operations within the Asian country.
The world is watching
Glaxo’s third-quarter results were the main event of today, but alongside the results Glaxo’s 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. Peer Johnson & Johnson had 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.