Walgreens pharmacy business drives profit, sales beat
A customer walks out of a Walgreens pharmacy store in Austin, TX, U.S., March 26, 2018. Picture taken on March 26, 2018. REUTERS/Mohammad Khursheed (Reuters)
(Reuters) - Walgreens Boots Alliance Inc's. quarterly profit and sales beat analysts' estimates on Wednesday, as the drugstore chain's partnerships with pharmacy benefit managers over the past year helped it fill more prescriptions and mail orders.
Shares of the biggest U.S. drugstore chain operator were up 4 percent in premarket trading on Wednesday. Rival CVS Health Corp's. stock also rose 1 percent.
Walgreens, which has been focusing on its pharmacy business in the face of falling retail sales, added more than 20 million members through its partnership with pharmacy benefit managers such as Minnesota-based Prime Therapeutics.
This helped fill 9.1 percent more prescriptions in the quarter and drive a 5.1 percent rise in pharmacy same-store sales.
The higher number of prescriptions also comes as the United States faced its harshest flu season in decades, with flu-related doctor visits reaching a 20-year high.
Same-store sales at its retail business fell 2.7 percent, missing analysts estimates of a flat growth, according to Evercore analyst Ross Muken.
The Deerfield, Illinois-based company lifted its full-year adjusted earnings forecast to between $5.85 and $6.05 per share from between $5.45 and $5.70 per share. Analysts were estimating $5.78 per share for the year.
The lift in forecast reflects a $350 million tax benefit for fiscal year 2018, an increase of about $150 million from the company's previous estimate.
Net income attributable to the company rose to $1.35 billion, or $1.36 per share, in the quarter ended Feb. 28 from $1.06 billion, or 98 cents per share, a year earlier.
Excluding items, Walgreens earned $1.73 per share. Net sales rose 12 percent to $33.02 billion, helped in part by Walgreen's ongoing takeover of nearly 2,000 Rite Aid stores.
Analysts on average were expecting a profit of $1.55 per share on revenue of $32.19 billion, according to Thomson Reuters I/B/E/S.
(Reporting by Uday Sampath and Tamara Mathias in Bengaluru; Editing by Saumyadeb Chakrabarty)