Walgreens tops profit estimates as health-care unit improves
Walgreens Boots Alliance Inc. reported quarterly profit that exceeded Wall Street’s expectations, marking a strong performance in what is likely one of its last quarters as a public company.
Adjusted earnings per share for the fiscal quarter ending Feb. 28 reached 63 cents, above the average analyst estimate of 53 cents, partly driven by cost savings and improvements in the health-care business, the company said Tuesday. Revenue was $38.6 billion, above the average analyst estimate of $38 billion.
Walgreens shares rose less than 1% before markets opened in New York. They were up about 15% for the year when markets closed Monday.
The results are welcome news for investors of the second-largest US pharmacy chain, who have been concerned about the ability of Walgreens to make enough money amid declining insurance payments for prescription drugs, and increased competition from online retailers and big box stores. Its value has plummeted over the past decade and last month the chain agreed to be purchased by Sycamore Partners for $10 billion in a deal expected to close by the end of the year.
Sycamore is known for purchasing retailers, not health-care companies, and has been discussing splitting up the company, the Wall Street Journal reported. Under private ownership, Walgreens will be more free to make long-term changes with less concern for their impact on the day-to-day stock price or quarterly earnings.
Because of the planned acquisition, Walgreens isn’t holding a conference call with Wall Street analysts to discuss the results.