Walgreens Boots Alliance (NASDAQ:WBA) shares gained ground on Tuesday, when it said its quarterly profit declined more than 20%, driven by sharply lower COVID vaccine volumes and test sales compared to last winter, when the Covid Omicron variant surge drove strong demand.
Revenue, however, came in higher than Wall Street’s expectations, rising 3.3% year over year.
Earnings per share amounted to $1.16, adjusted, vs. $1.10 expected, on revenue of $34.86 billion, vs. $33.53 billion expected
The drugstore chain and health care company reported a net profit of $703 million, or 81 cents a share, compared to $883 million, or $1.02 a share, in the same quarter a year ago. Excluding certain items, per-share earnings were $1.16 for the period.
Operating income fell to nearly $200 million from more than $1.2 billion a year earlier, reflecting a $306-million pre-tax charge for opioid litigation claims, higher investments in pharmacy wages and costs associated with its $3.5 billion investment in the acquisition of Summit Health.
Under CEO Rosalind Brewer, now in her second year, Walgreens has focused on growing the company’s health unit primary care and in-home services. During the quarter, Walgreens invested $3.5 billion toward VillageMD’s acquisition of primary care provider Summit Health.
Health care unit revenues topped $1.6 billion in the quarter, with primary care services growing 30% at VilliageMD, including Summit Health, while home care at CareCentrix was up 25%.
Walgreens gathered $1.07, or 3.3%, early Tuesday to $34.02.