Rite Aid posts quarterly and annual profits, shares up

A shopper exits a Rite Aid store in New York in this file photo taken June 23, 2010. The third largest U.S. drugstore chain posted its second consecutive quarterly profit on Thursday, as it filled more prescriptions and sold more generic drugs, which carry higher profit margins.

(Reuters) - Rite Aid Corp (RAD.N) posted its second consecutive quarterly profit on Thursday, topping Wall Street's expectations, as the third-largest U.S. drugstore chain filled more prescriptions and sold more generic drugs, which carry higher profit margins.

Its shares shot up more almost 20 percent to $2.14, their highest since 2009. Rite Aid is up more than 50 percent so far this year, yet still far below the $51 range from back in 1999 before an accounting scandal was uncovered.

Fiscal 2013 results benefited from an increase in customers for the 8-1/2-month period when rival drugstore chain Walgreen Co (WAG.N) did not fill prescriptions for patients on Express Scripts Holding Co (ESRX.O) benefits plans.

Rite Aid, which trails Walgreen and CVS Caremark Corp (CVS.N) in size and sales, has been remodeling stores and emphasizing its loyalty program, while continuing to close some stores.

Fiscal 2013 was the first full year since fiscal 2007 that Rite Aid turned a profit, and it expects to do so again in the current year.

Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, rose to $340.3 million from $274.3 million a year earlier. Rite Aid cited better pharmacy gross margin, as new generic drugs were introduced, and said that it also filled more prescriptions at comparable stores.

The adjusted EBITDA came in well ahead of Raymond James analyst John Ransom's forecast of $289 million.

On a net basis, Rite Aid earned $123.1 million, or 13 cents per share, for the fourth quarter ended March 2, compared with a year-earlier loss of $161.3 million, or 18 cents a share.

Fourth-quarter revenue fell to $6.46 billion from $7.15 billion a year earlier, when there was an extra week in the quarter.

Analysts, on average, had expected a loss of 2 cents per share and $6.43 billion in revenue, according to Thomson Reuters I/B/E/S.

Sales at stores open at least a year fell 2 percent.

Last week, the company said same-store sales also fell 2 percent in March. Walgreen, which is trying to win back Express Scripts patrons with offers such as a new loyalty program, said last week that its March same-store sales rose 0.7 percent.

Rite Aid said it expected to earn $45 million to $200 million, or 4 cents to 20 cents per share, this year. It forecast fiscal 2014 sales of $24.9 billion to $25.3 billion, with same-store sales down 0.75 percent to up 0.75 percent.

(Reporting by Jessica Wohl in Chicago; Editing by Jeffrey Benkoe, Lisa Von Ahn and David Gregorio)