Walgreens Stock Slides As $6.5 Billion Opioid Charge Clouds Earnings Beat
Walgreens booked a $6.5 billion charge to its first quarter earnings linked to its role in the U.S. opioid crisis.
Walgreens booked a $6.5 billion charge to its first quarter earnings linked to its role in the U.S. opioid crisis.
Walgreens (WBA) - Get Free Report posted better-than-expected first quarter earnings Thursday, while lifting its full-year sales forecast, but booked a $6.5 billion charged linked to opioid settlements that sent its shares lower in pre-market trading.
Walgreens Boots said adjusted earnings for the three months ending in November, the company's fiscal first quarter, came in at $1.16 per share, down 31% from the same period last year but 3 cents ahead of the Street consensus forecast. Group revenues, Walgreens said, fell 1.7% from last year to $33.4 billion, again topping analysts' forecasts of a $32.77 billion tally, as U.S. same-store pharmacy sales rose 3.8%.
Looking into the current fiscal year, Walgreens reiterated that said it sees adjusted earnings in the region of $4.45 to $4.65 per share but noted that overall sales will likely improve to between $133.5 billion and $133.7 billion.
The group also detailed a $6.5 billion charge from settlements with several states attorneys general "in connection with the previously announced opioid litigation settlement frameworks and certain other opioid-related matters."
"WBA delivered a solid start to the fiscal year, as we continue to accelerate our transformation to a consumer-centric healthcare company," said CEO Rosalind Brewer. "We're making significant progress in driving our U.S. Healthcare segment to scale and profit, including the recent VillageMD acquisition of Summit Health."
"Our core retail pharmacy businesses in both the United States and United Kingdom remain resilient in challenging operating environments," she added. "Execution across segments reinforces our confidence in achieving full-year guidance, and our strategic actions are creating long-term shareholder value."
Walgreens shares, a Dow component, were marked 2.4% lower in pre-market trading immediately following the earnings release to indicate an opening bell price of $36.58 each.
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