Glaxo slides on earnings downgrade [Western Morning News (England)]
(Western Morning News (England) Via Acquire Media NewsEdge) A profits warning from GlaxoSmith-Kline curtailed a rally for the FTSE 100 Index yesterday as shares in the pharmaceuticals giant slid by nearly 5%. The FTSE 100 Index finished 2.8 points higher at 6798.1, having earlier made headway on the back of gains for Vodafone and outsourcing firm Capita. The pound slipped against the dollar, at 1.70, and held steady against the euro, at 1.27, after the latest minutes from the Bank of England showed that low wage growth prevented members from considering a first rates hike in five years. GlaxoSmithKline declined almost 73.5p to 1481.5p after it reported a 22% decline in half-year operating profits to Pounds 2.94 billion and warned that earnings per share in 2014 were now likely to be flat this year.
The company's performance continues to be hit by falling drug and vaccine sales in the United States, driven by competition from generic products.
Vodafone did its best to prop up the London market after former US partner Verizon reported a bigger-than-expected surge in second quarter revenues as it benefits from strong demand from wireless customers. The UK mobile phone giant, which is due to present its own figures tomorrow, rose by 1.3p to 197p.
Outsourcing firm Capita set the pace at the top of the FTSE 100 Index after it achieved a 16% rise in half-year underlying profits to Pounds 238 million. It said it secured Pounds 1.3bn of major contract wins in the six-month period, while revenues improved 13.9% to Pounds 2.1bn. Shares surged by almost 5% or 55p to 1210p.
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