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GlaxoSmithKline Q3 Net Profit Up 7 Percent

LONDON (AP) - Growing sales in Japan and emerging markets have propelled drug maker GlaxoSmithKline to a 7 percent rise in profit in the third quarter, in line with market forecasts.

The company reported Wednesday that net profit grew to 1.38 billion pounds ($2.2 billion) compared to 1.29 billion pounds a year earlier.

Revenue rose 4.3 percent to 7.1 billion pounds.

GSK said underlying sales were up 57 percent in Japan and 11 percent in emerging markets, while sales were up just 1 percent in the U.S., the company's biggest market, and down 4 percent in Europe.

The company announced that it was raising its interim dividend by 6 percent to 17 pence, and boosting its share repurchase target in the current year by 300 million pounds to 2.3 billion pounds.

GlaxoSmithKline's shares were up 0.8 percent at 1,393.5 pence in mid-afternoon trading in London.

"Management continues to enhance its reputation, with the group delivering across the strategic board," said Keith Bowman, analyst at Hargreaves Lansdown Stockbrokers.

However, he noted that the company was under pressure from shrinking government health care budgets.

The sales surge in Japan was led by GSK's cervical cancer vaccine Cervarix, which is being used in a national vaccination program.

Vaccine sales overall were up 16 percent, also helped by strong performances of Synflorix, which targets meningitis and pneumonia in young children, and Rotarix for gastroenteritis.

GSK's asthma drug Advair (Seretide) remained its top seller despite a 3 percent drop in sales; it generated 1.2 billion pounds in revenue, or 23 percent of GSK's pharmaceutical and vaccine sales.

Posted: October 2011