Difficult European conditions hit GlaxoSmithKline, whose 4th-qtr profits slumped

UK pharma giant GlaxoSmithKline (LSE: GSK) blamed tough conditions in European markets for a decline in sales and profits for the fourth quarter, as it announced its 2012 financial results, and is looking to cut costs further this year, with a cost-cutting program, particularly in Europe, to deliver savings of at least £1 billion ($1.57 billion) in 2016.

Fourth-quarter turnover declined 3% to £6.80 billion, with core operating profit up 1% at £2.29 billion and core earnings per share up 4% at 32.6 pence. In total results, operating profit rose 3% to $1.94 billion but EPS plunged 29% (-24% at constant exchange rates) to 17.8 pence. For full-year 2012 turnover fell 3% to £26.43million, core operating profit was 5% lower at £8.33 billion with core EPS down 2% to 112.7 pence. Total operating profit was $£7.39 billion, down 5% and EPS fell 11% to 92.9 pence.

Pharmaceuticals and vaccine sales were both down 2% (at CER) for the year, at £17.99 billion and £3.32 billion, respectively. For the fourth quarter, pharma turnover decline 1% to £4.69 billion and vaccines advanced 10% to £864 million. Consumer healthcare sales were £5.11 billion for the year and £1.25 billion for the quarter.