By RTT News, October 23, 2013, 09:17:00 AM EDT
(RTTNews.com) - British pharma giant GlaxoSmithKline plc (GSK.L, GSK) reported Wednesday a decline in third-quarter profit on one-time costs as well as lower turnover, mainly reflecting sharply lower sales in China and a decline in vaccine shipments in emerging markets. Further, the company reaffirmed its fiscal 2013 growth forecast. The company also announced higher dividend.
In China, the company's operations have been disrupted by the ongoing investigation following bribery charges. The company said it continues to co-operate with the authorities, and that it is still too early to quantify the longer-term impact of the investigation on its performance in that country.
In the third quarter, the company's pre-tax profit decreased to 1.40 billion pounds from 1.49 billion pounds a year ago. Core pretax profit, which excluded certain items, was 1.90 billion pounds, compared to last year's 1.78 billion pounds.
Core basic earnings per share was 28.9 pence.
The company said the core results reflected continued strong cost control, and the delivery of a further benefit from a program of initiatives that was started in 2012 to re-shape and reduce certain long-term operating expenses.
Turnover decreased to 6.51 billion pounds from 6.53 billion pounds last year. On constant exchange rates, turnover edged up 1 percent.
In constant currencies, US and European regions posted higher turnover in the quarter, despite intensifying price competition in the US, and challenging conditions in Europe. Meanwhile, turnover outside US and Europe dropped 3 percent.
Japanese sales grew 3 percent, while turnover from EMAP region declined 6 percent impacted by the timing of vaccine tender shipments and a 61 percent sales decline in China. Excluding the decline in China sales, EMAP results increased.
In the quarter, operating profit declined 5 percent to 1.57 billion pounds, while core operating profit grew 6 percent from last year to 2.06 billion pounds. Core operating profit margin was 31.6 percent.
Further, the company announced a third interim dividend of 19 pence, 6 percent higher than last year. The company also said it continues to target share repurchases of 1 billion pounds to 2 billion pounds by the end of 2013.
As part of its measures to drive strategic focus and improve growth outlook, the company said it recently agreed to divest Lucozade and Ribena to Suntory for 1.35 billion pounds and Arixtra/Fraxiparine and related manufacturing site to Aspen for 700 million pounds.
Further, GlaxoSmithKline said it continues to expect full-year 2013 core earnings per share growth of 3 percent to 4 percent on sales growth of around 1 percent, both at constant exchange rates.
In London, GlaxoSmithKline shares are currently trading at 1,568.50 pence, down 32.50 pence or 2.03 percent.
In pre-market activity on NYSE, shares lost $1.01 or 1.95 percent, and traded at $50.74.
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