GlaxoSmithKline Plc (NYSE: GSK), the U.K.’s biggest drugmaker, said first-quarter profit climbed 14 percent, lifted by a gain from the sale of its stake in Quest Diagnostics Inc.

Net income rose to 1.53 billion pounds ($2.53 billion) from 1.34 billion pounds in a year earlier, London-based Glaxo said in a statement today. Earnings excluding restructuring costs totaled 32.2 pence a share. Analysts predicted a profit of 31.6 pence a share on that basis, according to the average of 12 estimates compiled by Bloomberg.

Profit rose even as Glaxo lost influenza vaccine sales after the end of the flu pandemic, and as the Valtrex antiviral drug faced competition from generic products. Revenue from the Avandia diabetes medicine plunged after the company stopped promoting it worldwide because of an increased risk of heart attacks.

(Read the earnings report details here.)

GSK employs some 4,000 people at its U.S. headquarters in Research Triangle park, N.C.

“The first quarter was probably the toughest for Glaxo in terms of year-on-year comparisons for generic competition to products like Valtrex and other elements, such as pandemic flu,” Alistair Campbell, an analyst at Berenberg Bank in London, said in a telephone interview before the earnings were published. “It should get better in the second half.” He recommends buying the stock.

Glaxo rose 18 pence, or 1.4 percent, to 1,278.5 pence at 12:25 p.m. in London trading. The stock has returned 11 percent in the past year including reinvested dividends, compared with an 8.9 percent return for the Bloomberg Europe Pharmaceutical Index.

Revenue fell 10 percent to 6.59 billion pounds, compared with the average analyst estimate of 6.6 billion pounds.

Glaxo in February sold its stake in Quest, generating a profit of 246 million pounds after tax in the quarter. The drugmaker also sold its U.S. and Canadian rights to the Zovirax cream against herpes to Valeant Pharmaceuticals International Inc.

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