GlaxoSmithKline Sees Higher Sales in Third Quarter But Lower Profit

By Denise Roland 

LONDON-- GlaxoSmithKline PLC reported climbing sales but lower profits in the third quarter of 2015 on Wednesday, as it continued its shift to a higher-volume, lower-margin business following its $20 billion asset swap deal with Novartis AG.

The company said revenue increased 9% to GBP6.13 billion ($9.37 billion) in the three months to Sept. 30. Core operating profit, a measure which strips out certain one-off items, dipped 9% to GBP1.72 billion, though net profit, at GBP538 million, was 34% higher than a year ago. Analysts had expected revenue of GBP6.1 billion and core operating profit of GBP1.5 billion.

Glaxo's lower profit in the third quarter was partly due to its shift toward low-margin vaccines at the expense of more profitable cancer drugs following its asset swap with Novartis.

The deal, which involved Glaxo trading its cancer drugs for the Swiss company's vaccines business, closed in the second quarter of this year. The slump in core operating profit was also driven by the year-earlier figure benefiting from a one-off gain of GBP219 million.

The strength of the pound dampened Glaxo's results. Adjusting for currency headwinds, revenue increased 11% and core operating profit fell 5%.

Write to Denise Roland at [e-mail]

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(END) Dow Jones Newswires

October 28, 2015 08:48 ET (12:48 GMT)

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