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Investing.com — Shares in Haleon (NYSE:HLN), formerly the consumer health division of GlaxoSmithKline (NYSE:GSK), hit their highest in three months on Thursday after the company announced better-than-expected sales in the third quarter and raised its profit forecasts for the full year.
The company behind Sensodyne toothpaste, Voltaren, and Theraflu said it now expects organic revenue to rise by between 8% and 8.5% this year, after a strong performance by its oral health division and sustained demand for respiratory products, thanks to the ongoing incidence of COVID-19.
By 03:35 ET (08:35 GMT), Haleon (LON:HLN) stock was up 0.7% in London at 288.4 pence, having earlier touched 294.40, its highest since August.
The stock has struggled since Haleon made its debut in the summer, as many GSK investors fretted about rising global interest rates. GSK had unloaded £10 billion of its debt onto Haleon’s balance sheet, reflecting the more stable nature of its cash flows.
Those cash flows were expected to come under pressure due to higher costs for labor, energy, and other inputs this year, but Haleon largely rose to the challenge, combining an average price increase of 5.5% and a 2.6% gain in sales volumes to post an 8.1% rise in organic revenue in the three months through September.
Haleon also said it expects sterling‘s weakness to allow it to improve slightly on last year’s adjusted operating margin of 22.8%. At constant currencies, its operating margin fell 70 basis points in the third quarter, but the pound’s depreciation kept the reported decline to a more modest 20 basis points.
Chief executive Brian McNamara warned that “macroeconomic conditions remain volatile and uncertain,” but said he was still confident in delivering on the company’s medium-term guidance.
