GlaxoSmithKline Profit Surges

Third-quarter earnings at GlaxoSmithKline (GSK Quote) roughly doubled to $1.2 billion, as strong sales of its depression drugs offset the impact of generic competition on its antibiotic Augmentin.

The company earned $1.2 billion, or 42 cents an American depositary share, on revenue of $7.74 billion, compared with earnings of $536 million, or 18 cents an ADS, on revenue of $7.19 billion last year. Pharmaceutical sales rose 6% to $6.5 billion, with U.S. sales up 9% to $3.5 billion.

Analysts had been forecasting earnings of 51 cents an ADS. The shares were down more than 6% to $38.71 in morning trading.

GlaxoSmithKline said sales of drugs that work on the nervous system rose 21% to $1.7 billion in the quarter, with sales of antidepressant Paxil, its biggest drug, up 27% in the U.S. and sales of Wellbutrin up 53% in the U.S. Consumer health care sales inched up 4% to $1.2 billion, while sales of antibacterials fell 15% to $678 million, reflecting the Augmentin competition.

The company still expects earnings to rise 10% for the full year and climb in the high-single-digit percentages in 2003, assuming it can beat back intellectual property litigation surrounding Paxil.