Drugstore operator Walgreens Boots Alliance reported that their quarterly profits increased 2.4 percent to $29.5 billion compared to the analysts’ estimates, thanks to the cost-cutting measure and higher sales from prescription drugs like Medicare Part D drugs. Its earnings per share also accordingly rose to $1.18 than analysts’ estimates of $1.14, according to according to Thomson Reuters.
Overall for its fiscal third quarter ended May 31, pharmaceutical revenue was up 5.8 percent, while the profit is $1.10 billion down from $1.30 billion of last year, and drugstores filled 235 million prescriptions and immunizations, up about 3.9 percent.
The company gave further details of its results (cited from Bloomberg.com):
- Revenue rose 2.4 percent to $29.5 billion; analysts anticipated $29.7 billion.
- Retail pharmacy sales rose 3.7 percent to $21.2 billion; Same-store sales increased 3.9 percent.
- Low end of 2016 guidance increased to $4.45 to $4.55 a share, compared with past projection in April of $4.35 to $4.55.
- Net income decreased to $1.1 billion, or $1.01 a share, from $1.3 billion, or $1.18 per share, a year earlier.
- Cost reductions for last three quarters were $947 million, including $330 million in the fiscal third quarter.
It also reported that Walgreens is waiting for the antitrust regulators’ approval of its $9.4 billion takeover plan of its rival Rite Aid Corp., which will greatly help to expand their stores in U.S. The Deerfield, Illinois-based drugstore chain was merged in 2014 between U.S. drugstore chain Walgreen and the European retailer and drug wholesalers Alliance Boots.
“We are very confident that this deal will go through,” Chief Executive Stefano Pessina said on Wednesday. “Our lawyers are telling us that we don’t have any negative signal” from federal regulators. Rite Aid shares rose 1.8% to $7.43 in early Wednesday trading, but are still well below the proposed $9-a-share purchase price.