Walgreen profit jumps 68 percent
The Deerfield Ill., company said Friday that it booked a total of $376 million in income during the quarter that ended Nov. 30 from its stakes in European health and beauty retailer Alliance Boots and U.S. pharmaceutical wholesaler AmerisourceBergen Corp.
Last year, Walgreen acquired a 45 percent stake in Alliance Boots, which runs the largest drugstore chain in the United Kingdom, and it has an option to buy the rest of the company in 2015.
Earlier this year, it also bought an ownership stake in AmerisourceBergen and entered a supply agreement with the company for its drugstores, mail order and specialty pharmacy businesses.
Analysts have said they like the potential for future growth that these deals give Walgreen.
Overall, Walgreen earned $695 million, or 72 cents per share, in its fiscal first quarter, up from $413 million, or 43 cents per share a year ago, when the company took a $24 million hit after Superstorm Sandy forced it to temporarily close hundreds of stores.
Revenue climbed 6 percent to $18.33 billion.
Adjusted earnings, which exclude one-time items, also totaled 72 cents per share.
Analysts forecast adjusted earnings of 72 cents per share on $18.36 billion in revenue, according to FactSet.
Walgreen also said prescription sales at stores open at least a year jumped 7.2 percent in the quarter, while sales from the front end, or the store areas outside its pharmacy, climbed 2.4 percent.
The company had said earlier this year that a soft economy was hurting its front-end results, and it was making improvement a priority. Walgreen also said Friday that an increase in promotions hurt its profit margin, as did a drop in the benefit it saw from generic drugs.
The bottom lines of Walgreen and other drugstore chains have benefited in the past several quarters from a wave of new generic drugs that is starting to wane.
Walgreen shares slipped 95 cents, or 1.7 percent, to $55.59 Friday before markets opened. The stock was up 54 percent so far this year through Thursday. The shares have set new all-time high prices several times in 2013, according to FactSet.
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