GlaxoSmithKline plc (GSK,GSK.L) Wednesday reported lower profit for the first quarter, amid a 3 percent drop in turnover. The drugmaker said it has decided to divest nutritional drinks brands Lucozade and Ribena, if it gets appropriate value for shareholders. The firm also backed its full year outlook.
Profit before tax fell to 1.411 billion pounds from 1.856 billion pounds. Prior-year results have been restated. Profit attributable to shareholders declined to 961 million pounds from $1.308 billion pounds. Earnings per share were 19.6 pence, down from 26 pence last year..
The drugmaker noted that some significant asset disposal profits recognised last year were not repeated in the first quarter of 2013. The latest results also included higher restructuring costs.
Core earnings per share totaled 26.9 pence in the just concluded quarter, same as in the previous year. Turnover dropped to 6.471 billion pounds from last year's 6.640 billion pounds. Excluding the impact of disposals, currency-neutral turnover grew 2 percent. Pharmaceuticals sales slid 1 percent to 4.444 billion pounds, hurt by austerity pressures in Europe. Within the business, respiratory sales gained 6 percent, while Central nervous system and Cardiovascular & urogenital sales dropped 8 percent and 24 percent, respectively.
Segmental and regional revenue break-ups are at constant exchange rates.
Vaccines generated 680 million pounds, down 11 percent from last year. In the previous year, the firm saw strong Cervarix sales in Japan that benefited from the final stage of the HPV catch-up vaccination program.
Consumer Healthcare revenues edged up 1 percent to 1.347 billion pounds. Excluding the non-core OTC brands divested in the first half of 2012, turnover grew 6 percent.
Sales dropped 5 percent in the U.S. and 4 percent in Europe, while it advanced 6 percent in EMAP.
Looking ahead to 2013, the drugmaker still expects core earnings per share growth of 3 to 4 percent at constant currency rates with turnover growth of around 1 percent.
Further, the company said it completed the strategic review of nutritional drinks brands Lucozade and Ribena this month. The review concluded that the growth potential of these brands, particularly outside the core Western markets, could be better leveraged by companies with existing category presence and infrastructure in these regions. As a result, GlaxoSmithKline decided to pursue the divestment of these brands, ''subject to the realisation of appropriate value for GSK shareholders.'' GSK.L is currently gaining 0.8 percent at 1,691.30 pence.
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