LONDON – GlaxoSmithKline, the U.K.’s largest drugmaker, cut its sales and profit margin forecasts for the year on Wednesday as revenue declined in Europe and the U.S.

Earnings excluding some items were 26.4 pence a share, London-based Glaxo said in a statement. That compared with the average estimate of 26.8 pence from 12 analysts surveyed by Bloomberg. Sales dropped 4 percent to 6.46 billion pounds ($10 billion), missing the average analyst estimate of 6.63 billion pounds.

New treatments for cancer and heart disease failed to counter an 8 percent sales decline in Europe, where governments are cutting spending on health care amid sluggish economic growth. Revenue this year will be in line with 2011 revenue excluding currency swings, Glaxo said.

The company previously forecast that sales would increase this year.

“Glaxo’s growth drivers – vaccines, dermatology, emerging markets and consumer – are not growing sufficiently strongly to offset the impact from EU austerity,” said James Gordon, an analyst at JPMorgan Chase & Co. in a note to investors before the earnings announcement.

Sales in the U.S. fell 6 percent as some products faced generic competition and others were discontinued, Glaxo said.

The core operating profit margin will be “broadly in line” with last year’s 32.1 percent, Glaxo said. Previously the company forecast the margin would “begin to improve gradually” this year.

Glaxo shares fell 1.6 percent to 1,422 pence in London trading. The stock had returned 14 percent in the year through yesterday, compared with a 19 percent return for the Bloomberg Europe Pharmaceutical Index.

Glaxo reiterated a plan to repurchase as much as 2.5 billion pounds of stock this year. The drugmaker also raised its dividend 6 percent to 17 pence, matching the Bloomberg dividend forecast.

The company announced two purchases in the quarter.

In May, Glaxo said it will pay 61 million pounds to take full control of Cellzome and boost its drug discovery efforts. Last week, Glaxo agreed to buy Human Genome Sciences Inc. for $3 billion in cash, winning control of its U.S. partner on the Benlysta lupus therapy. The purchase should be completed in the third quarter.

Glaxo and Human Genome are also collaborating on late-stage experimental drugs darapladib to prevent heart attacks and albiglutide to treat diabetes. Glaxo plans to seek regulatory approval of albiglutide, a once-weekly injection, early next year.

Glaxo also plans to submit dolutegravir, a treatment for HIV, and a LAMA/LABA therapy for respiratory disease, to regulators for clearance by early 2013. Details from four late- stage studies on the lung medicine may be presented at a medical meeting in Vienna in September. A separate drug for respiratory disease, to be marketed as Relvar or Breo, was submitted in the U.S. and Europe earlier this month.