Walgreen quarterly profit sinks nearly 26 percent
Walgreen Co.'s fiscal first-quarter earnings sank nearly 26 percent as the nation's largest drugstore chain filled fewer prescriptions and absorbed costs tied to acquisitions and Superstorm Sandy.
The Deerfield, Illinois-based company's performance fell short of Wall Street expectations, and the stock slipped Friday before markets opened.
Walgreen said the storm system that swept up the East Coast in late October cost $24 million in the quarter, as it temporarily closed hundreds of stores. Acquisition-related costs totaled $23 million in the quarter.
Walgreen said prescriptions filled at stores open at least a year fell nearly 5 percent, a smaller decrease than the 8 percent drop it reported in the previous quarter. The drugstore chain said the improvement was due to its return to the network of Express Scripts Holding Co., the nation's largest pharmacy benefits manager.
Overall, Walgreen earned $413 million, or 43 cents per share, in the three months that ended Nov. 30. That compares with net income of $554 million, or 63 cents per share, a year ago. Walgreen said earlier this month revenue fell nearly 5 percent in the quarter to $17.34 billion.
Excluding one-time costs, adjusted earnings were 58 cents per share, which missed analyst expectations.
Analysts forecast, on average, earnings of 70 cents per share, according to FactSet.
Shares dropped 2.5 percent, or 95 cents to $36.60 in premarket trading.
Walgreen runs more than 8,000 drugstores in all 50 states. The company's revenue has slumped through 2012 after it started the year stuck in a contract squabble with Express Scripts, for which it fills prescriptions.
The companies had let a contract between them expire last December, and their new agreement didn't start until September. The split meant many Express Scripts customers went to new drugstores for their prescriptions.