Sep 28, 2012 / 9:38 am
Walgreen Co.'s fiscal fourth quarter net income tumbled 55 per cent compared to a year ago when the drugstore operator recorded a big business sale gain.
Its adjusted earnings still trumped Wall Street expectations. But shares of the nation's largest drugstore chain fell almost 2 per cent in premarket trading Friday.
The Deerfield, Ill., company's stock price had climbed more than 17 per cent in the quarter.
Walgreen said Friday that it absorbed a bigger inventory-related charge in this year's quarter and another charge due to a multi-billion dollar investment in European health and beauty retailer Alliance Boots. Walgreen also took another sales hit from a split with pharmacy benefits manager Express Scripts Holding Co. that shifted customers away from its stores.
Overall, Walgreen earned $353 million, or 39 per share, in this year's quarter. That compares to $792 million, or 87 cents per share, a year ago.
Excluding one-time items like the charges, Walgreen earned 63 cents per share. That topped analyst expectations of 55 cents per share, according to FactSet.
Revenue fell 5 per cent to $17.1 billion from $18 billion a year ago.
Walgreen runs 7,930 drugstores in all 50 states, the District of Columbia, Puerto Rico and Guam, or more than its main competitors CVS Caremark Corp. and Rite Aid Corp.
The company announced in June that it planned to branch out overseas with the Alliance Boots investment. That amounted to $4 billion in cash and more than 83 million shares for a 45 per cent ownership stake in the Swiss company, which runs the largest drugstore chain in the United Kingdom. Walgreen took a 9-cents-per-share charge in the quarter from that deal.
The company also recorded a "last-in-first-out" inventory charge of 10 cents per share in this year's quarter compared to 4 cents per share last year.
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