GlaxoSmithKline PLC (GSK) Thursday reported declining fourth-quarter earnings hit by extra charges, saying that it won't provide a specific outlook for 2009 as it expanded its restructuring program.

The world's second-largest drugmaker said it is now targeting savings of GBP1.7 billion by 2011, up from a previous target of GBP0.7 billion, but didn't provide details on job reductions planned in the restructure.

GlaxoSmithKline, which has more than 100,000 employees worldwide, said the decision to scrap specific forecasts isn't connected to its performance, but indicates that the company is focusing on its long-term strategic priorities.

"We enter 2009 with confidence and expect to make further good progress in implementing our strategic priorities that will enable us to meet our long-term objective of reducing risk and delivering sustainable growth to shareholders," Chief Executive Andrew Witty said in a statement.

Jeremy Batstone-Carr of Charles Stanley described GlaxoSmithKline's decision to change the way it reports guidance as disappointing, and said his add rating on the stock may come under review following the results.

Deutsche Bank analysts, who have a hold rating on the stock, called GlaxoSmithKline's decision not to offer specific guidance for its 2009 earnings a "smart move," saving the company the negative market reaction that recently hit the shares of European peers AstraZeneca PLC (AZN), Novartis AG (NVS) and Roche Holding AG (ROG.VX).

CEO Witty, speaking during a conference call, ruled out any interest in pursuing large merger and acquisition deals, saying that GlaxoSmithKline would prefer small- to mid-sized acquisitions with a focus on emerging markets and consumer healthcare.

Like other major pharmaceutical companies, GlaxoSmithKline is facing increased pressure from generic competition and the looming patent expiry of multi-billion dollar selling drugs, without new products that promise to offset their loss.

Witty's comments follow Pfizer Inc's (PFE) decision last month to buy smaller rival Wyeth (WYE) for $68 billion, prompting speculation that the industry is preparing for a further round of large merger and acquisitions.

GlaxoSmithKline's net profit in the last three months of 2008 fell to GBP982 million from GBP1.06 billion, hit by a $400 million extra legal charge GlaxoSmithKline disclosed last week, as well as restructuring charges.

Before taking into account restructuring charges, pretax profit rose 2.7% to GBP1.92 billion from GBP1.87 billion a year earlier.

Analysts polled by Dow Jones had expected fourth-quarter net profit of GBP1.43 billion on sales of GBP6.54 billion.

Still, ETX Capital's senior trader Manoj Ladwa called GlaxoSmithKline's overall results "impressive," commenting that the drug maker is "bucking the general economic trend and remains confident for 2009."

At 1423 GMT, shares in GlaxoSmithKline, which have risen around 6% in the last 12 months, were up 0.5%, or 6 pence, at 1274 pence in a broadly lower London market. The stock was down 2.4% just before the company's announcement.

Sales in the quarter, up 16% to GBP6.91 billion, received a boost from sterling's lower value against other currencies, because GlaxoSmithKline books a large portion of its revenues in dollars and euros but reports its accounts in sterling.

Revenues were also helped by the growing contribution from GlaxoSmithKline's emerging markets operations and its vaccines business, whose sales rose 15% in 2008.

Witty, who took charge in May 2008, wants to reduce the company's reliance on blockbuster drugs and focus on areas with more growth potential, such as biotech treatments, emerging markets, vaccines and non-prescription products.

In 2008, the company's consumer healthcare sales rose 3% to GBP4 billion. GlaxoSmithKline said it's monitoring the potential impact from the economic downturn on the business, which sells products like toothpaste, painkillers and weight-loss pill Alli and which could become vulnerable as consumers reduce their discretionary spending.

Turning to its pipeline, the Brentford, England-based company said it is filing cancer drug pazopanib with the U.S. regulator and that it's moving Syncria, a potential new treatment for diabetes, to late-stage studies.

Company Web site: www.gsk.com

-By Elena Berton, Dow Jones Newswires; 44 20 7842 9267; elena.berton@dowjones.com