The strength of sterling had a big impact on results at GlaxoSmithKline (GSK) in the first quarter, while sales fell short of analysts' expectations due to weakness in the US market.
Core turnover during the first three months of the year dropped by 10% on a reported basis to £5.61bn, with sales dampened by a stronger pound against the dollar, euro, yen and a range of emerging market currencies.
Revenue at constant exchange rates
(CER) was just 2% lower, but still came in below the consensus forecast of £5.84bn.
Pharmaceutical and Vaccines sales were down 3% at £4.49bn over the year as growth across all of GSK's major regions was outweighed by a 10% decline in the US, where results were affected by continued competition in the respiratory markets and quarterly volatility in wholesaler/retailer stocking patterns.
Meanwhile, Consumer Healthcare sales were flat at £1.13bn.
Core earnings per share (EPS) were down 20% at 21p over the year but increased by 2% at CER, more or less in line with estimates.
GSK maintained its guidance for EPS to grow by 4-8% at CER over the 2014 financial year. However, the company failed to give specific guidance for expected sales growth this year, simply saying that it "expect[s] to grow sales at CER". In February, it had forecast 2% growth for this year.
"The exact level of sales growth will depend on a number of factors, including the roll-out of new products, the level of generic competition to older products, including Lovaza for which a generic approval was granted in April, and the phasing of resupply of products in our Consumer Healthcare business," explained Chief Executive Sir Andrew Witty.
GSK raised its quarterly dividend by 6% to 19p per share.
Strong sales growth in the US helped veterinary products maker Dechra Pharmaceuticals accelerate revenues in a strong third quarter, in line with management expectations.
Revenue for the quarter ending March 31st was 4.7% ahead of last year's weak comparatives, 4.9% at constant currencies, meaning revenue growth for the nine month of the year so far was up 2.8% at reported currency and 1.3% at constant currency.
Sales growth in the US was particularly strong, up 16.3% on the same period last year and 22.4% at constant currency, but poor weather in Europe meant revenues increased by just 3.3%, or 2.9% at constant currency.
Last year's trading statement at this juncture was a warning due to a 15.4% decline in the US, so this year's statement was hailed by analysts at Panmure Gordon as "a revelation" by contrast.
Sales of companion animal products (CAP) in Europe were strong at 9% but there was a continued decline of bulk antibiotic products, with food producing animal products (FAP) sales were flat and improved performance of equine products offsetting a 5% decrease of large animal antibiotics products.
Geographic expansion continued, with the opening of an Italian subsidiary on March 1st and a new Canadian subsidiary on track to open this coming autumn.
"By establishing our own brand within these markets, we should deliver additional margin and growth in the future," the company said in a statement.
Dechra also noted that it continued to make "significant progress" on its pipeline and anticipates being able to give an update prior to the year end, and that it was making "good progress with our key strategic growth drivers".
Broker Shore Capital said it suspected this last reference referred to progress of the pipeline particularly in the companion animal segment.
Shore noted that previous guidance suggested that pressure on bulk antibiotics will ameliorate "although it is important to look out for any signs of similar pressure elsewhere".
"The company has previously noted that the second half was affected by ordering patterns which became more obvious as the pharma business was separated from the legacy services business. We expect these to reverse in the second half."