Walgreen Numbers Down Due to Express Scripts Dispute
Drugstore chain Walgreen Co (NYSE:WAG) missed analysts’ estimates when it reported its numbers for the first quarter.
Net income was down 4.5% to $554 million (63 cents a share) compared to $580 million (62 cents) in the previous year. Analysts had expected 67 cents.
Profits were hit by the company’s dispute with employee-benefit manager Express Scripts Inc (NASDAQ:ESRX), which drove customers to the waiting arms of competitors CVS Caremark (NYSE:CVS), Rite Aid Corp. (NYSE:RAD), Walmart (NYSE:WMT), and Target (NYSE:TGT). Results also reflected the delayed onset of the cold and flu season. Beginning Jan. 1, Walgreens doesn’t plan to be part of the Express Scripts network.
“Patients could develop new buying habits as they are forced to move away from Walgreen to other retailers if no deal is reached,” Tom Gallucci, an analyst at Lazard Capital Markets in New York, wrote today in a note to clients. “After working to move their prescriptions to a new store, all patients may not return to Walgreen even if they ultimately regain access to Walgreen.”
Here’s how Walgreen shares are reacting to the news:
Walgreen Co. (NYSE:WAG): WAG shares recently traded at $31.75, down $1.75, or 5.22%. They have traded in a 52-week range of $30.34 to $47.11. Volume today was 8,301,549 shares versus a 3-month average volume of 8,715,900 shares. The company’s trailing P/E is 10.80, while trailing earnings are $2.94 per share. Get the most recent company news and stock data here >>