UN Unilever NV

LONDON—GlaxoSmithKline PLC said profit soared in the third quarter, in part thanks to a boost from the weakness of the pound following Britain's vote to leave the European Union.

The U.K.-based drugmaker, which reports in sterling but makes almost all its sales in other currencies, is benefiting from the persistent weakness of the pound as politicians start thrashing out the terms of the country's exit from the EU. The pound has fallen some 19% against the U.S. dollar and 15% against the euro since the June 23 referendum.

It said net profit for the three months to Sept. 30 climbed 50% to £ 808 million ($987 million), from £ 538 million a year earlier. Core operating profit, a measure that strips out one-time items, rose 35% to £ 2.3 billion, while revenue jumped 23% to £ 7.5 billion. Excluding currency effects, core operating profit rose 13% while revenue climbed 8%.

Apart from boosting companies who report their results in sterling, the falling pound is taking various tolls on corporate Britain.

For Glaxo, it has affected the way drugs are traded around the EU. Chief Executive Andrew Witty said the level of drugs imported into the U.K. from the rest of the bloc had diminished since the referendum vote.

Free trade across the bloc allows member states to take advantage of price differences in drugs by importing medicines from nations where they carry a lower price, such as Romania, into higher-priced markets. Mr. Witty said that when the pound is strong, as much as 30% of some Glaxo drugs purchased in the U.K. are sourced from elsewhere in the bloc. A weak pound minimizes or may even reverse those price differences, reducing these so-called parallel imports into the U.K.

In other ways, the falling pound has taken less of a toll on Glaxo than other companies. Mr. Witty said it had not forced Glaxo to raise prices of the drugstore staples it sells, such as painkillers and toothpaste, because it manufactures many of these goods here.

That stands in contrast to consumer goods giant Unilever PLC, maker of many well-known food and personal hygiene brands, which earlier this month raised its prices because of the increased cost of exporting ingredients to the U.K.

The substantial currency effect flattered an already-solid quarter for Glaxo, as sales of new drugs more than offset declining revenue from Advair, a best-selling respiratory drug that faces increasing competition. Sales of recently launched medicines such as Advair successor Breo and HIV medicine Tivicay increased 89% in the quarter to £ 1 billion, bringing total pharmaceuticals revenue to £ 4 billion, up 6% from a year ago.

The company's vaccines and consumer health-care businesses also posted sales growth, up 20% and 5% respectively at constant exchange rates from the year-earlier period.

Glaxo backed its full-year outlook. It continues to expect earnings per share to increase 11% to 12% at constant exchange rates in 2016 and to pay a full-year dividend of 80 pence.

Write to Denise Roland at Denise.Roland@wsj.com

(END) Dow Jones Newswires

October 26, 2016 10:05 ET (14:05 GMT)

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