GlaxoSmithKline's (GSK) second-quarter earnings per share tumbled 16 per cent due to cut-price generic competition and a weak dollar, Europe's biggest drug maker said today.
GSK is suffering the toughest trading conditions since it was formed nearly four years ago, but the results, buoyed by cost savings, were not as bad as investors had feared and the shares rose two per cent .
Pre tax profits for April-June fell 17 per cent to £1.631 billion while earnings per share came in at 20.1 pence, beating the average forecast of 19.2p in a Reuters poll of 16 analysts.
Chief executive Mr Jean-Pierre Garnier reiterated he expected a return to growth from the fourth quarter. Frankly, we are going through the eye of the storm now," Garnier told reporters in a conference call.
"The comparisons get easier and easier as we go forward, and that's why we are predicting a return to growth in the fourth quarter and positive earnings per share growth in '05."
Mr Garnier said the Anglo-American group was going through a trough as the full impact of cheap copies of antidepressants Paxil and Wellbutrin in the United States sliced into sales. A weak dollar means the figures are even worse when translated into sterling.
Overall, quarterly sales fell 6 per cent from a year ago to £5.06 billion, which was light of the £5.13 billion forecast by analysts. Revenues from Paxil, once GSK's top seller, were down 41 per cent at £284 million.
For the full year, GSK reiterated that it expected earnings, excluding negative currency effects, to at least match the 2003 level.