Glaxo sees 22% drop in income

By Trista Kelley  |   2008-10-23  |     NEWSPAPER EDITION

GLAXOSMITHKLINE Plc, the world's second-largest drug maker, said profit fell 22 percent in the third quarter on slowing sales of the Avandia diabetes medicine.

Net income fell to 1.03 billion pounds (US$1.69 billion), or to 20 pence a share, from 1.31 billion pounds, or 23.5 pence a year earlier, London-based Glaxo said yesterday in a Regulatory News Service statement. Excluding restructuring costs, earnings were 25.2 pence a share, beating the median 24.1-pence estimate of eight analysts surveyed by Bloomberg News. Glaxo reported sales of 5.88 billion pounds.

Glaxo cut jobs as part of a plan to trim 700 million pounds in costs by 2010 after a report linking Avandia to heart attack risks led to a plunge in sales of the drug. The firm generates about 45 percent of its sales in the United States and the strengthening of that country's currency against the pound gave a boost to reported revenue.