P.M. BRIEFING : SmithKline Profits Drop 65%
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LONDON — SmithKline Beecham PLC reported today that its profits for 1989 declined 65% over a year ago due largely to heavy costs associated with the recent merger that created the world’s second-largest pharmaceuticals company.
The company said its net profit totaled $209 million, compared with $591 million in 1988. Sales, however, rose 14% to $7.9 billion from $6.9 billion.
The full-year results were the first for the company since its merger in July, 1989. Britain’s Beecham Group PLC and Philadelphia-based SmithKline Beckman Corp. merged through an exchange of shares, creating the second-largest pharmaceuticals company after Rahway, N.J.-based Merck & Co.
The 1989 results included an $805-million restructuring charge as a result of the combination for closing some of its facilities, cutting staff and writing down certain assets. SmithKline Beecham said it also took a $124-million extraordinary loss due to merger transaction costs.
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