Walgreens Drops on Earnings Miss - InvestingChannel

Walgreens Drops on Earnings Miss

Walgreens Boots Alliance (NASDAQ:WBA) missed Wall Street earnings expectations Wednesday, sending shares south.

The drug chain reported earnings per share of $1.37 adjusted, vs. $1.41 expected. Revenue was $34.34 billion, vs. $34.6 billion expected. That represents an increase of 1.6% from the year-ago quarter, and an increase of 2.3% on a constant currency basis.

Fiscal 2020 first quarter net earnings attributable to Walgreens Boots Alliance decreased 24.8% to $845 million compared with the same quarter a year ago, while net earnings per share1 decreased 19.8% to $0.95 compared with the same quarter a year ago.

Walgreens remains under pressure as more consumers shop online for drugstore staples such as shampoo and vitamins. Insurers are also squeezing pharmacies, paying them less to fill prescriptions.

In response, Walgreens is slashing costs. The company aims to trim more than $1.8 billion by fiscal year 2022.

Its cost-cutting program caused a 55% slide in profit during its fiscal fourth quarter as it spent more to shutter unprofitable locations, the company said when it reported those earnings Oct. 28. Excluding those expenses, currency exchange rates and other items, Walgreens beat earnings expectations by two cents per share.

Walgreens has a market cap of $52.6 billion as of Tuesday’s close.

Net cash provided by operating activities was $1.1 billion, an increase of $601 million. Free cash flow was $674 million, an increase of $684 million

Shares slumped $3.52, or 5.9%, to $55.77