GlaxoSmithKline sales fell 8 percent in the third quarter, hurt by continued pressure on drug prices in austerity-hit Europe and lower demand for vaccines compared to a year ago.
Sales of 6.53 billion pounds ($10.50 billion) generated core earnings per share (EPS) down 13 percent at 26.5 pence, as Britain's biggest drugmaker suffered another tough quarter.
Analysts, on average, had forecast sales of 6.67 billion pounds and core EPS, which excludes certain items, of 27.8p, according to Thomson Reuters I/B/E/S.
GSK, like its rivals, has suffered a string of patent expiries in recent years and is struggling to grow sales, even though it has come through the so-called patent cliff earlier than others.
Chief Executive Andrew Witty said the results were impacted by demanding prior year comparisons, product disposals and continuing weakness in Europe.
The worsening situation in Europe is a significant burden, with sales in the region falling 9 percent in three months to end-September.
Until July, GSK had been predicting a return to sales growth this year. It revised its 2012 sales outlook down to flat at mid-year and reiterated this forecast on Wednesday, with the caveat that this excluded any further deterioration in Europe.
The vaccines business suffered a particularly difficult comparison in the third quarter, since Japan bought a large amount of the company's Cervarix shot against cervical cancer a year earlier and GSK also shipped a lot of flu vaccine a year ago.
Excluding these vaccine factors and the impact of product disposals, GSK said sales for the latest quarter were broadly in line with last year.
Witty is diversifying GSK to cut reliance on white pills in Western markets, the part of the business most vulnerable to price cuts and generic competition. The strategy involves a push into both emerging markets and non-prescription consumer health.
The heart of the company, however, remains its pipeline of prescription drugs, where GSK is stepping up investment on experimental medicines for diseases ranging from HIV/AIDS and cancer to chronic lung conditions.
Part of the investment involves buying up rights to products previously shared with other companies, as GSK did in July by buying Human Genome Sciences for $3 billion and again this week with a revamped deal for HIV drug dolutegravir.