Walgreen profit jumps 68 percent

Walgreen’s fiscal first quarter earnings soared 68 percent, helped in part by investments that the nation’s largest drugstore chain has made in other companies.

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.

More in Herald Business Journal

Teddy, an English bulldog, models Zentek Clothing’s heat regulating dog jacket. (Ian Terry / The Herald)
Everett clothing company keeps your dog cool and stylish

Zentek uses space-age fabrics to moderate the temperature of pets and now humans.

Everett engineers learn lessons from Mexico City catastrophe

Structural scientists went to help after the September earthquake there and studied the damage.

Providence said to be in talks for merger with Ascension

The two Catholic health organizations have been exploring joining forces, sources say.

Hospital companies merge as insurers encroach on their turf

An anticipated deal between Providence St. Joseph Health and Ascension is only the latest.

DaVita to sell off medical groups including The Everett Clinic

Another round of health care consolidation means The Everett Clinic could soon get new ownership.

Engine trouble hits Air New Zealand’s 787 Dreamliners

A Rolls-Royce engine was shut down and was afterward found to be seriously damaged.

Washington, Amazon sue company over seller training programs

Braintree is accused of using deceptive ads promising information on how to make money on Amazon.

Lockheed-Martin dominates global arms sales, Boeing is 2nd

The combined sales of U.S.-based companies totaled $217 billion.

The Marine Corps’ version of the F-35 Joint Strike Fighter is designed to land vertically like a helicopter. (Lockheed Martin)
F-35 fighter costs, $1 trillion over 60 years, draw scrutiny

Pentagon’s ability to repair F-35 parts at military depots is six years behind schedule.

Most Read