Walgreens Boots Alliance, Inc. | $WBA Stock | Shares Tumble Despite Upbeat Earnings

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Walgreens Boots Alliance, Inc. (NASDAQ: WBA) 


Shares of Walgreens tanked 9% before the opening bell on Thursday, after the retail pharmacy chain operator revealed better-than-expected third quarter earnings.

The positive results prompted the company to announce a $10 billion share repurchase program, and raise its quarterly dividend by 10%.

Walgreens’ quarterly results come only days after the company took the place of General Electric Company on the Dow Jones Industrial Average (DJIA).

WBA stock has lost nearly 9% since the beginning of the year. The shares have dropped 14% in the last twelve months.

WBA Earnings & Outlook

The drug store chain posted a net income $1.34 billion, or $1.35 per share, compared to $1.16 billion or $1.07 a share, in last year’s comparable quarter.

Adjusted earnings per share for the quarter ended May 31 came in at $1.53, up 15% from the same quarter last year. Sales stood at $34.33 billion, an increase of 14% from the prior-year period.

Analysts had modelled adjusted earnings per share of $1.48 on sales of $34.10 billion, according to Thompson Reuters.

The Retail Pharmacy USA segment recorded sales of $25.9 billion, up 15%, and in line with Thompson Reuters estimate. Looking ahead, Walgreens expects 2018 adjusted earnings per share of $5.90 to $6.05 from the earlier guidance of $5.85 to $6.05. 

Walgreens CEO Comments

I am pleased that, in what has been a challenging environment, we have again delivered solid earnings per share growth combined with healthy cash flow. We expect to continue to drive growth, bringing more patients to our U.S. pharmacies through the recent acquisition of Rite Aid stores and through strategic partnerships. The $10 billion share repurchase program announced this morning demonstrates our confidence in future business performance and, as ever, our focus on driving long-term stockholder value,” said Stefano Pessina, Walgreens’ executive vice chairman and chief executive officer.

Walgreens Boots Alliance, Inc. Company Profile

Walgreens Boots Alliance is a drug store services company based in Deerfield, Illinois. It operates through Retail Pharmacy International, Pharmaceutical Wholesale, and Retail Pharmacy USA segments.

The Retail Pharmacy International segment operates retail stores in the UK, Chile, Netherlands, Thailand, Mexico, the Republic of Ireland, and Norway.

This segment sells prescription drugs; and beauty & health products through its retail stores.

The Retail Pharmacy USA division sells prescription and non-prescription drugs, general merchandise, greeting cards, beauty products, convenience foods, seasonal merchandise, and photo finishing through its convenient care clinics and retail drugstores.

In addition, it manages in-store clinics; and provides specialty mail services and pharmacy services.

This segment operated a total of 8,100 retail stores as of August 31,2017, under Duane Reade and Walgreens brands in the U.K; and around 400 in-store clinics, as well as 7 specialty pharmacies.

The Pharmaceutical Wholesale division is involved in wholesale distribution of beauty and health products, home healthcare equipment and supplies, as well as generic and specialty pharmaceuticals.

It operates in Egypt, Lithuania, France, U.K., Germany, Romania, Turkey, Spain, Netherlands, Norway, and Czech Republic. –Reuters