GlaxoSmithKline

Arthi Gupta
27 Oct, 2010
New York City

The UK indexes edged lower after commodities stocks fell. GlaxoSmithKline finalized $750 million settlement with the U.S. Shell agreed to sell downstream businesses in Finland and Sweden. Interserve won contracts worth

[R]4:00 PM London – The UK indexes edged lower after commodities stocks fell. GlaxoSmithKline finalized $750 million settlement with the U.S. Shell agreed to sell downstream businesses in Finland and Sweden. Interserve won contracts worth £42 million.[/R]

In London, FTSE 100 Index traded lower 50.80 or 0.89% to 5,656.50 and the pound edged lower to close at $1.5831.

The Bank of England Monetary Policy Committee member Adam Posen said today that the fundamentals of the British economy are sound and the country has fended off the financial crisis. In an interview with the Irish Times, Posen said the British economy is recovering and an above-target inflation is not hurting growth.

""We''ve fended off the financial crisis, currency and interest rates are stable and there is price stability because, while we overshot a bit on our inflation target, let''s be realistic, 3.5% is a far cry from double digit inflation,"" media quoted Posen as saying.

In another statement, the Bank of England Deputy Governor Charles Bean said in a speech to the Statistics User Forum Conference that the margin of unused resources determines how much the economy can grow during the recovery before it puts significant upward pressure on inflation.

GlaxoSmithKline plc finalized a £500 million or $750 million previously reported settlement with the U.S. Attorney''s Office for the District of Massachusetts and the U.S. Department of Justice related to the investigations by the U.S. Government on manufacturing issues at its Cidra facility.

The company noted that it will pay a total of $750 million in civil and criminal penalties as part of a comprehensive settlement of this investigation. The settlement is related to bad manufacturing practices at the company''s former Cidra, Puerto Rico-based manufacturing facility.

Royal Dutch Shell Plc, the integrated petroleum company said that it would sell majority of its refining and marketing businesses in Finland and Sweden to Keele Oy for around $640 million in cash.

The terms of the deal, which are subject to regulatory approvals, include Shell''s retail business, including 340 service stations in Sweden and 225 stations in Finland as well as its commercial road transport in both markets.

Petrofac Ltd. was granted a contract worth excess of £500 million by Total E&P UK Limited for the development of a gas processing plant on the Shetland Islands. Work is scheduled to begin in October 2010, with first gas expected from the project in second quarter of 2014.

In addition, Petrofac would develop the 500 million cubic feet per day gas processing plant through its offshore engineering business unit.

Interserve Plc has been awarded three schools contracts worth an aggregate £42 million. The first contract is a £23 million improvement program for Farnley Park High School in Leeds. The second one is a £11 million of schools extensions in the Nottinghamshire Construction Framework. The last one is a £ 8 million contract to increase the capacity of four schools for Coventry City Council.

Gainers & Losers

British American Tobacco Plc fell 1.53% to $76.11 after the global tobacco company said that revenues for the nine months ended September 30 grew from the prior-year period, although volumes decreased 1% mainly due to market size declines.

The company said volumes from subsidiaries for the period declined 1% to 526 billion. Organic volumes declined 3% from last year, due to market size declines and an increase in illicit trade in some markets. Volumes were also impacted by the loss of sales in Pakistan after the floods.

Carpetright plc plunged 5.62% to 689.00 pence after the specialist carpet and floor covering retailer said group sales for the 12 weeks ended October 23 declined 5.2%, with the year-on-year effect of closing of operations in Poland accounting for 0.5% of this decline.

CSR plc plummeted 11.4% to 305.80 pence after the chipmaker reported third quarter revenue rose 6% to $222.06 million from $209.87 million last year. Profit in the quarter soared 220% to $27.35 million or 15 cents per share from $8.55 million or 5 cents per share reported last year.

DS Smith plc dipped 0.78% to 165.50 pence after the packaging supplier and office products wholesaler stated first-half results are expected to show a strong improvement on the comparable period for last year.

DQ Entertainment Plc gained 1.49% to 136.00 pence after the animation developer signed a deal with Israel based Play Records Marketing & Distribution Ltd.

First Derivatives plc fell 0.03% to 374.90 pence after the financial trading software and consulting services provider reported first-half revenues surged 56.2% to £17.74 million from £11.36 million last year. Profit for the period rose 11.4% to £2.35 million or 15.6 pence per share from £2.11 million or 15.4 pence per share in 2009.

Helphire Group plc plunged 26.67% to 22.00 pence after the accident management company said the group considers that its results for the year to June 30, 2011 will be below current market expectations, due to unfavorable market conditions.

SOCO International plc slumped 11.41% to 289.50 pence after the international oil and gas explorer said its drilling program showed progress at the onshore oil block in the Democratic Republic of Congo. The well was drilled to 1,164 meters depth.

Virgin Media, Inc. fell 1.45% to 24.39 pence after the provider of pay-television, telephone and broadband internet services reported third quarter revenue gained 6.4% to £978.4 million, compared with £919.4 million in the comparable period last year, reflecting revenue growth in all segments.

Net income was £41.8 million or 0.13 pence per share, compared with a loss of £60.1 million or 0.18 pence per share last year, helped by strong revenue growth in its consumer and business segments and an asset disposal gain.