UPDATE 1-Walgreen posts disappointing profit, withdraws 2016 forecast

Tue Jun 24, 2014 8:39am EDT

(Adds details on outlook, share price movement) (Adds forecast withdrawal, share move; compares with estimates)

June 24 (Reuters) - Walgreen Co, the largest U.S. drug retailer, reported a lower-than-expected quarterly profit and said it was withdrawing its forecast for 2016 as it moves toward the complete acquisition of Alliance Boots Holdings Ltd .

Shares of the company fell as much as 2.2 percent in premarket trading.

Walgreen said it would update investors on the Alliance Boots transaction and issue a new forecast by late July or early August.

The company's adjusted profit missed the average analyst estimate due to increased pressure on pharmacy gross profit margins and weak customer traffic.

In 2012, Walgreen acquired a 45 percent stake in Alliance Boots, which runs Europe's largest pharmacy chain, with an option to buy the rest in 2015. Walgreen then forecast 2016 combined revenue of $130 billion.

The drugstore operator had expected adjusted operating income of $9 to $9.5 billion for 2016.

The Illinois-based retailer's net income rose to $722 million, or 75 cents per share, in the third quarter ended May 31, from $624 million, or 65 cents per share, a year earlier.

Excluding items, the company earned 91 cents per share, with Alliance Boots contributing 15 cents.

Sales rose 5.9 percent to $19.40 billion.

Customer traffic in comparable stores decreased 0.7 percent.

Analysts had expected a profit of 94 cents on revenue of $19.48 billion, according to Thomson Reuters I/B/E/S.

Walgreen's shares were down at $72.12 in premarket trading.

(Reporting by Shailaja Sharma in Bangalore; Editing by Sriraj Kalluvila and Don Sebastian)

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