NEWS
10/28/2015 12:42 EDT | Updated 10/28/2016 01:12 EDT

Walgreens moves to profit in 4Q, but revenue growth falls short of analysts' estimates

DEERFIELD, Ill. — Walgreens, which is buying Rite Aid for about $9.4 billion, moved to a profit in its fiscal fourth-quarter, but its revenue growth fell short of analysts' expectations.

Shares fell 2 per cent in premarket trading Wednesday.

A day earlier Walgreens announced that it is buying rival Rite Aid, which will create a drugstore giant with nearly 18,000 stores around the world. The deal combines the largest and third-largest U.S. drugstore chains, based on store counts. And it makes one of the world's largest pharmaceutical buyers even bigger at a time when other key health care players like insurers and drugmakers also are expanding through multi-billion dollar deals. Less than a year ago Walgreens bought European health and beauty retailer Alliance Boots.

Walgreens — the largest U.S. drugstore chain — earned $26 million, or 2 cents per share, for the period ended Aug. 31. That compares with loss of $221 million, or 23 cents per share, a year ago.

Earnings, adjusted for non-recurring costs and costs related to mergers and acquisitions, were 88 cents per share.

The results beat Wall Street expectations. The average estimate of 13 analysts surveyed by Zacks Investment Research was for earnings of 81 cents per share.

Revenue for the Deerfield, Illinois-based company rose to $28.52 billion from $19.06 billion. But this was below the $28.86 billion in revenue that eight analysts surveyed by Zacks expected.

For the year, Walgreens Boots Alliance Inc. earned $4.22 billion, or $4 per share, on revenue of $103.44 billion. Its adjusted profit was $3.88 per share.

Walgreens expects fiscal 2016 earnings in the range of $4.25 to $4.55 per share. Analysts polled by FactSet predict $4.55 per share.

The company's stock slipped $1.91, or 2 per cent, to $93.25 about 45 minutes before the market open.

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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on WBA at http://www.zacks.com/ap/WBA

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Keywords: Walgreens Boots Alliance, Earnings Report

The Associated Press