Retail pharmacy giant Walgreens Boots Alliance (NASDAQ:WBA) reported its first-quarter earnings last week, and they came in better than expected. The company’s adjusted earnings per share of $1.16 was a couple cents higher than analyst forecasts of $1.14. And revenue of $33.38 billion was also a bit better than the $32.84 billion that analysts were expecting.
However, it wasn’t all good news for the business as the company reported a net loss of $3.7 billion due to a hefty $5.2 billion charge as a result of opioid litigation. And sales were down 1.5% from the same period last year. One of the key growth opportunities for the company is in the rollout of its primary care business, which is included within Walgreens’ relatively new U.S. Healthcare segment. In Q1, sales were $989 million but resulted in an operating loss of $436 million. It’s still a long way to go for Walgreens but the company projects that by fiscal 2025, the segment could bring in up to $16 billion in revenue.
Overall, investors weren’t too thrilled with the results as shares of Walgreens dropped 6% on the day as the stock continues to struggle to generate much bullishness. It finished the day at $35.19. A year ago, it was trading at more than $50.
Investors are taking a risk with Walgreens as the stock’s future is hazy and largely dependent on its gamble to get into primary care. For most risk-averse investors, this probably isn’t going to be an investment worth taking on as this has been an underwhelming stock to own over the years that simply hasn’t given investors much of a reason to expect that things will change in the near future.