Earnings Results: Walgreens stock surges as profit misses views, but high dividend looks safe

by | Oct 12, 2023 | Stock Market

Walgreens Boots Alliance Inc. missed fiscal fourth-quarter profit expectations and provided a downbeat outlook Thursday as the drug store chain and healthcare services company saw lower COVID-19 vaccine and testing volumes weighing on results. But the stock
surged 4.4% in morning trading Thursday, reversing a premarket loss of as much as 4.4%, after the company indicated that its relatively high dividend remained safe.

Net losses for the quarter to Aug. 31 narrowed to $180 million, or 21 cents a share, from $415 million, or 48 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share fell 17% to 67 cents, missing the FactSet consensus of 69 cents. Sales grew 9.2% to $35.42 billion, beating the FactSet consensus of $34.80 billion, as U.S. retail pharmacy sales rose 3.7%, international sales increased 12.4% and U.S. health care sales jumped 217% to reflect acquisitions. Walgreens saw a sharp drop-off in COVID-19 vaccinations in the quarter, administering about 400,000 of the shots, down from 2.9 million a year earlier, interim global CFO Manmohan Mahajan said on a call with analysts Thursday. The company said it has taken a number of steps to align its cost structure with its business performance, including planned cost cuts of at least $1 billion. Some of those savings will come from adjusting store hours based on local market trends, closing unprofitable stores, and streamlining the supply chain, including using artificial intelligen …

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