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LONDON (Alliance News) - GlaxoSmithKline PLC Wednesday reported a drop in revenue and net profit for the first quarter due to asset sales and a decline in sales of pharmaceuticals in the US, but the company also raised its dividend and reiterated its full-year profit guidance despite making its sales guidance more vague.

The drugs giant is in the midst of a major revamp, selling off some treatment areas and acquiring assets to bolster others.

"This quarter has amply demonstrated the very significant changes that are underway in GSK's portfolio. Our strategy to broaden the company's sales base is evidenced with the transition we are making to new products in our core franchises of Respiratory and HIV, further R&D delivery and the three-part transaction we announced last week with Novartis," Chief Executive Andrew Witty said.

Meanwhile, oil major Royal Dutch Shell said its earnings almost halved in the first quarter of the year, as it wrote down some of the value of its refineries in Europe and Asia due to declining refining margins and as its production fell.

However, Shell also said it would pay a higher dividend for the quarter as it returns some of the funds from its asset-sale programme to its shareholders.

Shell is following a recent trend for oil majors, with rivals BP and France's Total SA all reporting lower production and tighter refining margins, as exploration is becoming more difficult and costly. The companies are keeping shareholders sweet by selling off assets in an attempt to improve profitability and fatten payouts.
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FTSE 100: up 0.7% at 6,748.18
FTSE 250: up 0.4% at 15,882.36
AIM ALL-SHARE: up 0.2% at 814.43
GBP-USD: up at 1.6827
EUR-USD: down at 1.3824
GOLD: down at USD1,296.06 an ounce
OIL (Brent): up at USD108.87 a barrel
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Key UK Corporate News
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FTSE 100: Clothing and homeware retailer Next raised its profit and sales guidance forecasts for the year ahead, after reporting strong sales growth in the first quarter of the year from both its retail stores and online business. Tullow Oil has pushed ahead with the sale of its UK gas assets in the southern North Sea, selling stakes in two assets to Faroe Petroleum for up to USD75.6 million plus a royalty on developments at one of the assets. Standard Life said its assets under administration increased 1.5% in the first quarter driven by net inflows, but said recent changes to annuity regulations in the UK resulted in a reduction in UK annuity sales of around 50%. British American Tobacco said that revenue grew slightly at constant exchange rates in the first quarter, but dropped significantly when taking into account currency movements in the quarter. Chile-based copper mining company Antofagasta said production of copper, gold and molybdenum fell in the first quarter but was ahead of internal expectations, as it was beset by a number of problems including maintenance at its sites. Rolls-Royce Holdings is in talks with Germany's Siemens AG about a possible sale of its energy gas turbine and compressor business. Barclays is to create a "bad bank" to transform its investment banking operations, according to the Financial Times. BT said that its BT Broadband customers will continue received its BT Sport service for free for a second football season, as it kept pressure on rival British Sky Broadcasting. Engineering company GKN has agreed to sell its half of emissions reduction technology business Emitec Gesellschaft für Emissionstechnologie mbH to joint venture partner Continental AG for EUR46 million in cash.

FTSE 250: CSR swung to a pretax loss in the first quarter to March 28, hit by the continued decline of its legacy products, although it saw margins improve as it shifted its product mix. Heritage Oil said it had recommended a GBP924 million takeover offer from Al Mirqab Capital, an investment vehicle controlled by the royal family of Qatar. Online gaming software supplier Playtech has expressed confidence in its continuing growth prospects for 2014, as it saw revenue rise in the quarter to end-March. British brewer and restaurant owner Greene King said it expects to meet market expectations for the full year, supported by good like-for-like sales growth in both its retail and brewing businesses. Ultra Electronics Holdings maintained its expectations for the full-year in a statement ahead of its annual general meeting Wednesday. Dechra Pharmaceuticals said it has seen its revenue rise in the third quarter to end-March, seeing a strong performance from both its European and US operations. Home Retail Group reported an increase in revenue but a drop in its reported pretax profit for its recent financial year, as it continued to invest in its businesses, especially its plans to transform its Argos retail warehouse stores into a multi-channel retailer. Kazakhmys said production levels were down for copper and most of its by-product metals in its first quarter but it remains on track to meet targets over the full-year. Betting firm Ladbrokes reported a drop in operating profit in the first quarter of the year, hurt by an ailing online businesses and by football results at the beginning of the year went heavily against bookmakers. Domino's Pizza Group has appointed interim Chief Executive Officer David Wild to the role on a permanent basis, with immediate effect. SVG Capital said its net asset value per share increased by 0.5% over the first-quarter, while it also confirmed a GBP50.0 million tender offer. Packaging company DS Smith said its performance in the year to end-April had been in line with its expectations, driven by growth across its businesses and the synergies it has achieved through the acquisition of SCA Packaging.

AIM All-Share: Touchstone Gold is trading higher after it said it has already been approached by a number of technology companies that might be suitable for a reverse takeover once conversion from a gold exploration company has been approved by its shareholders. Also trading up is Botswana Diamonds as the the diamond miner said it has achieved positive results from initial analysis of exploration at its PL117 site in Orapa. Globo's shares have been boosted after it said it saw pretax profit rise in 2013, driven by strong revenue growth from its mobile software products GO!Enterprise. GameAccount Network is also trading higher; the company swung to a pretax profit in 2013, in a year that saw revenues more than double. Sylvania Platinum's shares are up after revenues jumped 24% in the third quarter compared to the previous quarter as production and sales prices increased. Shares in Range Resources have risen as the hydrocarbon exploration firm said its Atzam #5 well in Guatemala has been successfully drilled and found oil and gas in three lower reservoir sections. At the other end of the market sits Proxama, trading lower after the mobile financial services company posted a widened loss for 2013 as revenue declined and it posted an exceptional charge relating to its listing on AIM August 2013 via the reverse takeover of Longships PLC. Pentagon Protection is trading down after it said the employment of Sales Director Stephen Harrhy had been terminated with immediate effect. It didn't give any other details in its statement. Norcon shares are down after the company said it narrowed its losses in the recent full year, as finance costs were reduced while its European businesses delivered a number of projects. Shares in LED International Holdings have dropped as the firm said that the receipt of funds from its recent fundraising had been delayed, the latest setback in a months-long struggle to raise new money.
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Top Economics And General
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Eurozone inflation accelerated from a 52-month low in April as the decline in energy prices slowed from last year, flash data from Eurostat showed. Flash inflation increased to 0.7% in April from 0.5% in March. However, the rate was slightly slower than the 0.8% forecast by economists. Inflation has been staying below the European Central Bank's target of 'below, but close to 2%' for the fifteenth consecutive month. Core inflation, excluding energy, food, alcohol and tobacco, rose to 1% from 0.7% a month ago.
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German unemployment declined by more than expected in April, official data showed. The number of people out of work declined 25,000 in April from March, the Federal Labor Agency reported. This was the fifth consecutive decline in unemployment. Economists had forecast unemployment to decline by 10,000 in April. At the same time, the jobless rate remained unchanged at seasonally adjusted 6.7% in April, in line with expectations.
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German retail sales declined unexpectedly in March driven by a notable decrease in food product turnover. Retail sales fell 1.9% from last year, offsetting February's 1.9% increase, Destatis reported Wednesday. This was the first decline since December. Economists were expecting a 1.7% rise.
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The Bank of Japan maintained its upbeat forecast of hitting its 2% inflation target in fiscal 2016 without adding more stimulus. Earlier in the day, the bank left its monetary policy unchanged as widely expected by economists. At the Policy Board meeting, members voted unanimously to continue to increase the monetary base at an annual pace of about JPY 60-JPY 70 trillion. In its latest semi-annual outlook report, the bank said inflation excluding the effects of tax hikes, will reach 2.1% between April 2015 and March 2016. The estimates for fiscal 2016 were issued for the first time.
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Japan's central bank also downgraded the nation's economic growth forecast for the current financial year. The central bank expects the world's third-largest economy to expand 1.1% for the year through March 2015, revised down from a 1.4% growth it estimated in January. The bank also predicts the country's consumer prices will climb 1.3% in the current financial year, unchanged from the previous prediction.
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The second day of a 48-hour Tube strike caused more misery for London commuters, though London Underground said it was managing to run limited services on all 11 lines. Underground workers began the strike - over a dispute about hundreds of planned job cuts and ticket office closures - at 9 pm (2000 GMT) on Monday. Commuters crowded outside tube stations from early in the morning, though many trains were too packed for people to board. Others formed long queues for buses or chose to walk, drive or cycle to work. The Rail, Maritime and Transport Union, which called the strike, accused London Underground of "misleading" the public about the level of services available, saying it had left "platforms and stations dangerously overcrowded."
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Afternoon Watchlist (all times British Summer Time)

14:45 US Chicago Purchasing Managers' Index
15:30 US EIA Crude Oil Stocks change
16:30 UK MPC Member Dale Speech
19:00 US Fed Interest Rate Decision
19:00 US Fed's Monetary Policy Statement
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Thursday's Key UK Corporate Events

Howdens Interim Management Statement
Millennium & Copthorne Hotels Q1 Results
Synthomer Interim Management Statement
Wolfson Microelectronics Q1 Results
N Brown Full Year Results
Go-Ahead Group Interim Management Statement
Lloyds Banking Group Interim Management Statement
Weir Group Interim Management Statement
BG Group Q1 Results
British Sky Broadcasting Group Q3 Results
Lancashire Holdings Q1 Results
Rolls-Royce Holdings Interim Management Statement
RPS Group Interim Management Statement
Schroders Interim Management Statement
Shire Q1 Results
Smith & Nephew Q1 Results
Phoenix Group Holdings Interim Management Statement
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Thursday's Key Economic Events (all times British Summer Time)

All Day China Labour Day
All Day Germany Labour Day
All Day Russia Labour Day
All Day France Labour Day
02:00 China NBS Manufacturing PMI
06:00 Japan Vehicle Sales
07:00 UK Nationwide Housing Prices
09:30 UK M4 Money Supply
09:30 UK Markit Manufacturing PMI
09:30 UK Net Lending to Individuals
09:30 UK Consumer Credit
09:30 UK Mortgage Approvals
12:30 US Challenger Job Cuts
13:30 US Fed's Yellen Speech
13:30 US Initial Jobless Claims
13:30 US Continuing Jobless Claims
13:30 US Personal Income
13:30 US Core Personal Consumption Expenditure
13:30 US Personal Consumption Expenditures
13:30 US Personal Spending
14:45 US Markit Manufacturing PMI
15:00 US Construction Spending
15:00 US ISM Manufacturing PMI
15:00 US ISM Prices Paid
15:30 US EIA Natural Gas Storage change
21:00 US Total Vehicle Sales
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By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance

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