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LONDON (Alliance News) - Drugs giant GlaxoSmithKline PLC Wednesday reported higher fourth quarter profits as revenues increased and it cut costs, and it confirmed that it expects to launch late stage clinical trials on ten new drugs over the next two years.
The performance was driven by strong sales of vaccines and pharmaceuticals, while sales of consumer healthcare products was flat. Currency fluctuations also weighed on its reported results for the year.
The company reported a pretax profit of GBP2.55 billion for the three months to end-December, up from GBP1.73 billion a year earlier, as revenues rose to GBP6.91 billion, from GBP6.80 billion. Its earnings per share rose to 51.3 pence, from 17.5 pence.
Profit and revenue growth accelerated for Glaxo in the final quarter. Pretax profit for the whole of 2013 increased to GBP6.65 billion, from GBP6.60 billion in 2012, as revenues rose to GBP26.51 billion, from GBP26.43 billion. Earnings per share rose to 112.5 pence, from 91.6 pence.
The results for both the fourth quarter and full year were in line with analysts' forecasts.
Its 2012 results were restated to take account of a change in accounting rules governing employee benefits.
Glaxo said it expects its core earnings per share to grow between 4% and 8% in 2014 at constant currency rates and for revenues to grow 2% at constant exchange rates and excluding divestments it made in 2013.
It said it expects data from late-stage trials on six potential new drugs and vaccines over 2014 and 2015, while 10 new drugs will be advanced into the late-stage trial phase.
"The conversion of our advanced pipeline to approved products represents the next key step in our strategy to deliver sustainable organic growth and value to shareholders. The products we are currently launching will strengthen our existing businesses in Respiratory, Vaccines and support new growth in HIV and Oncology," Chief Executive Andrew Witty said in the earnings report.
In recent years, Glaxo, like many of the pharmaceutical industry's giants, has been selling assets and re-focusing its operations on a smaller number of businesses. Its three main divisions are now pharmaceuticals, vaccines and consumer healthcare, and within pharmaceuticals Glaxo's focus is on areas including respiratory diseases, cancer, and diseases of the central nervous system.
It said it delivered cost savings of about GBP400 million in 2013 and expects to deliver a similar amount in 2014.
The fourth quarter pharmaceutical revenue growth of 5% was driven by 7% growth in sales of respiratory drugs and 10% growth in anti-virals, both at constant exchange rates. Sales at Viiv Healthcare, which now controls Glaxo's HIV drug portfolio, were up 15% in the quarter.
Its consumer healthcare unit reported flat revenues in the quarter, while vaccine revenues rose 12%.
Currency moves weighed on the company's results. While full-year revenues were up 1% at constant currencies, they were flat when currency moves were taken into account. Core EPS was up 4% at constant currencies, but flat at actual exchange rates.
It said sterling's rise against a number of currencies, particularly the Japanese yen, weighed, partially offset by the pound weakening against the euro and US dollar.
It added that it is targeting share repurchases of between GBP1 billion and GBP2 billion in 2014 as it returns some of the cash from recent asset sales to its shareholders. It raised its fourth quarterly dividend to 23 pence a share, from 22 pence last year, bringing the total for 2013 to 78 pence, from 74 pence in 2012.
Glaxo shares were up 2.2% at 1,588.50 pence Wednesday, the third-biggest rise on the FTSE 100.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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