Walgreens Boots Alliance Inc (NASDAQ:WBA) posted mixed quarterly earnings Wednesday as profit beat Wall Street estimates but revenue came in light.
Additionally, WBA lifted the lower end of its full-year earnings forecast.
For the most recent quarter, WBA said net income came to $1.1 billion, or $1.01 a share, down from $1.30 billion, or $1.18 per share, in the prior-year period. On an adjusted basis, earnings were $1.18 a share, exceeding analysts’ average forecast of $1.14 a share, according to a survey by Thomson Reuters.
The bottom-line beat was driven by costs cuts, as well as higher sales of Medicare Part D drugs and non-pharmacy products in the United States. On the top line, net sales rose 2.4% to $29.5 billion, just short of the Street’s forecast for $29.71 billion.
U.S. same-store sales — an important retail industry metric — increased 6% because of a gain in prescriptions for Medicare Part D drugs. Same-stores sales for the front of the store inched up just 0.1%. International sales fell 2.3%.
Summing up the quarter, Chief Executive Stefano Pessina said in a statement:
“We delivered solid results in the quarter while continuing to make progress in several key areas, including our work to develop long-term strategic relationships and pursue partnership opportunities.”
WBA Stock Stuck in a Rut
For the full year, WBA raised its earnings outlook to a range of $4.45 to $4.55 a share, up from a prior forecast of $4.35 to $4.55. Analysts’ average forecast stands at $4.49 a share. Meanwhile, WBA said it expects to complete its acquisition of Rite Aid in the second half of the year, bringing its store count up to 12,000 from 8,200.
There’s good, there’s bad, but there’s very little that stands out as a reason to give shareholders cheer.
Walgreens stock has been stuck in a trading range for more than a year now, and the quarterly results are unlikely to be the catalyst that frees them.
Indeed, the market is going to remain somewhat cautious on this name as it completes its acquisition of smaller rival Rite Aid Corporation (NYSE:RAD).
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.