FILE PHOTO: Raindrops hang on a sign for Wall Street outside the New York Stock Exchange in New York. REUTERS/Mike Segar/File Photo
WALGREENS Boots Alliance Inc's quarterly profit beat Wall Street expectations on Tuesday, driven by better-than-expected sales in its retail pharmacy business, sending its shares 3% higher before the opening bell.
The company's U.S. retail pharmacy, its core operations, recorded revenue of $27.6 billion in the second quarter, surpassing analysts' estimate of $26.8 billion, as filling of non-COVID prescriptions offset a hit from falling demand for COVID vaccination.
Administration of COVID vaccines and testing had helped Walgreens offset low non-COVID prescription volumes initially in the pandemic, but the trend has now reversed, with demand for the shots waning in recent quarters, while prescription drug sales rise.
Comparable prescription filled, excluding vaccinations, increased 3.5%, while same-store pharmacy sales rose 4.9% from last year.
Walgreens, one of the largest U.S. pharmacies, has been looking to expand beyond its core business. It spent $5.5 billion in 2021 to take a majority stakes in two smaller healthcare providers, VillageMD and CareCentrix, and also completed its $9 billion acquisition of urgent care provider Summit Health in January.
The Walgreens Health segment saw a sharp increase in revenue to $1.6 billion, driven by VillageMD and Summit Health.
Walgreens said it had incurred a one-time opioid-related charge of $306 million in the quarter, and costs related to the acquisition of Summit Health.
Excluding one-off items, the company reported earnings of $1.16 per share for the quarter ended February, higher than the average analyst estimate of $1.10, according to Refinitiv IBES data. - Reuters
