LONDON (Alliance News) - GlaxoSmithKline PLC Wednesday said it now expects its full-year core earnings per share to be broadly similar to 2013, as it saw pretax profit decline in the half-year to the end of June.
At the time of its first quarter results in April, Glaxo had previously guided between 4% and 8% core earnings per share growth at constant exchange rates.
The pharmaceuticals giant Wednesday proposed an interim dividend of 19 pence per share, up from 18 pence. It noted that, given the strengthening of sterling on its free cash flow, share repurchases over 2014 were likely to be "immaterial."
Glaxo posted a pretax profit of GBP1.89 billion for the half-year, down from GBP2.70 billion, as revenue declined to GBP11.17 billion from GBP13.10 billion, hit by falling sales in its Pharmaceuticals and Vaccines segment, and its Consumer Healthcare segment.
The company said that its progress on newly launched products is being offset by pricing and contracting pressure in the US, additionally, generic competition to its high triglyceride treatment Lovaza has been more substantive and has hit earlier than expected, said Glaxo.
Pharmaceuticals and Vaccines sales dropped 4% in the half-year, particularly hit by the weaker performance in the US, which offset growth in emerging markets, and flat sales in Europe.
In Consumer Healthcare sales were down 4% due to supply interruptions in the US and Europe; the company said this supply position was now beginning to improve, and it expects sales in the segment for the full-year to be broadly flat.
The company's key product, the asthma and chronic obstructive pulmonary disease treatment Advair, continued to be hit by generic competition in the US, and well 19% in the second quarter, said the company.
Glaxo said that whilst sales of this product will continue to reduce, it expects its new products in the respiratory franchise including Breo, Anoro and Incruse, together with some of its pipeline products, to generate new sales growth.
The FTSE 100-listed company said that it was a "critical moment" to make the right choices, particularly around its investment to secure its long-term prospects.
Glaxo also said that it was continuing to fully co-operate with Chinese authorities on the ongoing investigation into allegations of bribery in the country. It reiterated that it was not possible to make a reliable estimate of the financial effect that would result from the investigations.
Shares in GlaxoSmithKline were trading 2.6% lower at 1514.9 pence per share, the second biggest faller on the FTSE 100 Wednesday afternoon.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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Glaxosmithkline (GSK)