(Adds details, compares with estimates, updates shares)
Dec 23 U.S. drugstore chain operator Walgreen Co
reported a better-than-expected quarterly profit, helped
by a record number of prescriptions filled, sending its shares
up 3.6 percent.
Cost savings resulting from its acquisition of the remaining
stake in Alliance Boots Holdings Ltd, Europe's biggest
pharmacy chain, also boosted first-quarter results.
The largest U.S. drug retailer also said it was on track to
reach its target of $650 million in savings from the Alliance
Boots deal in the fiscal year ending August 2015.
The company's margins, however, continue to remain under
pressure due to lower insurer payments for prescriptions amid
increased competition and a rise in generic drug prices.
Gross margins decreased 1 percentage point to 27.1 percent
in the first quarter ended Nov. 30, marking the fifth straight
quarter of decline.
The combined cost savings for Walgreen and Alliance Boots in
the quarter were about $140 million.
The company said in August it would acquire the 55 percent
it did not already own in Alliance Boots in a deal valued at $15
The company said it filled a record 222 million
prescriptions in the quarter ended Nov. 30, up 4.3 percent from
a year ago.
Smaller rival Rite Aid Corp also reported higher
quarterly sales and profit and lifted its full-year earnings
forecast last week, helped by strong prescription
Net income attributable to Walgreen rose 16 percent to $809
million, or 85 cents per share. Excluding items, earnings were
81 cents per share in the first quarter.
Net sales rose 6.7 percent to $19.55 billion, with
same-store sales rising 5.7 percent.
Analysts on average had expected a profit of 75 cents per
share on sales of $19.5 billion, according to Thomson Reuters
Walgreen's shares were trading at $76.90 before the bell on
(Reporting by Sruthi Ramakrishnan in Bengaluru and Nandita Bose
in Chicago; Editing by Ted Kerr and Saumyadeb Chakrabarty)