Walgreens 1Q Profit Tops Views, Raises Outlook

Features Dow Jones Newswires

Associated Press

(Associated Press)

Walgreens Boots Alliance reported weaker-than-expected revenue growth for its latest quarter, though profit came in above expectations, and the company raised its earnings outlook for the year.

Shares of Walgreens fell 1.9% in premarket trading Thursday.

Walgreens, which last year agreed to buy Rite Aid for about $9.4 billion, raised the bottom end of its 2016 earnings outlook by 5 cents, to a range of $4.30 to $4.55 a share.

The tie-up with Rite Aid, uniting two of the country's three biggest drugstore owners, would create a drugstore giant as companies across the U.S. health-care industry look for ways to bulk up.

Walgreens said the company and Rite Aid received requests for more information from the Federal Trade Commission last month. The deal was expected to draw scrutiny from antitrust regulators.

Walgreens said it still expects the deal to close in the second half of 2016.

For its fiscal first quarter ended Nov. 30, Walgreens said sales at its U.S. pharmacy locations open at least a year rose 5.8%. On the same basis, prescriptions filled grew 4.7% over the prior year.

Walgreens said it expects its distribution agreement with Valeant Pharmaceuticals International to boost its pharmacy market share this year.

In all, Walgreens posted a profit of $1.11 billion, or $1.01 a share, up from a prior-year profit of $850 million, or 89 cents a share.

Excluding special items such as acquisition expenses, earnings were $1.03 a share. Analysts polled by Thomson Reuters forecast 96 cents a share in adjusted earnings.

Revenue jumped 48% to $29.03 billion, fueled by its acquisition of the part of European drugstore chain Alliance Boots GmbH it didn't own already.

Analysts polled by Thomson Reuters forecast $29.24 billion in revenue.

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

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