Walgreens tops 2Q profit expectations, narrows 2016 forecast

Walgreens beat Wall Street's earnings expectations for its fiscal second quarter as sales rose nearly 14 percent, but the nation's largest drugstore chain remained conservative with its outlook for the year.

The Deerfield-based company said Tuesday that it would again raise the low end of its fiscal 2016 forecast by 5 cents per share, just as it did in January. The drugstore chain has yet to raise the top of that forecast, which it announced in October.

Company shares slipped in early morning trading before markets opened.

Walgreens said Tuesday that it now expects fiscal 2016 earnings to range between $4.35 and $4.55 per share.

Analysts forecast, on average, earnings of $4.48 per share, according to FactSet.

Walgreens runs more than 13,000 drugstores in 11 countries. It plans to boost that total by buying rival drugstore chain Rite Aid Corp. for more than $9 billion, a deal the companies expect to close in the second half of this year.

The chain has faced challenges like sluggish sales from store areas outside its pharmacies and prescription drug pricing pressure.

In its fiscal second quarter, revenue from established stores increased 2.2 percent compared to last year's quarter. That's considered a key indicator of a retailer's health, because it excludes the impact from recently opened or closed stores.

Overall, Walgreens Boots Alliance Inc. earned $930 million in the three months that ended Feb. 29. That's down 54 percent from the $2.04 billion the company reported in last year's quarter, due largely to an accounting change it booked in 2015 after Walgreens completed the acquisition of European health and beauty retailer Alliance Boots at the end of 2014.

Earnings, adjusted for one-time gains and costs, came to $1.31 per share in the most recent quarter.

Revenue climbed to $30.18 billion from $26.57 billion.

Analysts expected, on average, earnings of $1.27 per share on $30.72 billion, according to Zacks Investment Research.

Shares of Walgreens fell 71 cents to $85.60 in premarket trading about an hour before the market open.

The stock had increased slightly more than 1 percent since the beginning of the year.

_____

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

_____

Keywords: Walgreens Boots Alliance, Earnings Report