Strong prescription sales help Walgreen top profit estimates
Reuters
Published Dec 23, 2014 08:48AM ET
Strong prescription sales help Walgreen top profit estimates
(Reuters) - U.S. drugstore chain operator Walgreen Co (N:WAG) reported a better-than-expected quarterly profit, helped by a record number of prescriptions filled, sending its shares up 3.6 percent.
Cost savings resulting from its acquisition of the remaining stake in Alliance Boots Holdings Ltd (ABN.UL), Europe's biggest pharmacy chain, also boosted first-quarter results.
The largest U.S. drug retailer also said it was on track to reach its target of $650 million in savings from the Alliance Boots deal in the fiscal year ending August 2015.
The company's margins, however, continue to remain under pressure due to lower insurer payments for prescriptions amid increased competition and a rise in generic drug prices.
Gross margins decreased 1 percentage point to 27.1 percent in the first quarter ended Nov. 30, marking the fifth straight quarter of decline.
The combined cost savings for Walgreen and Alliance Boots in the quarter were about $140 million.
The company said in August it would acquire the 55 percent it did not already own in Alliance Boots in a deal valued at $15 billion.
The company said it filled a record 222 million prescriptions in the quarter ended Nov. 30, up 4.3 percent from a year ago.
Smaller rival Rite Aid Corp (N:RAD) also reported higher quarterly sales and profit and lifted its full-year earnings forecast last week, helped by strong prescription sales.
Net income attributable to Walgreen rose 16 percent to $809 million, or 85 cents per share. Excluding items, earnings were 81 cents per share in the first quarter.
Net sales rose 6.7 percent to $19.55 billion, with same-store sales rising 5.7 percent.
Analysts on average had expected a profit of 75 cents per share on sales of $19.5 billion, according to Thomson Reuters I/B/E/S.
Walgreen's shares were trading at $76.90 before the bell on Tuesday.
(Reporting by Sruthi Ramakrishnan in Bengaluru and Nandita Bose in Chicago; Editing by Ted Kerr and Saumyadeb Chakrabarty)
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.