Walgreens Fourth Quarter Has Strong Earnings, Delays Deal for Rite Aid

Earnings for Walgreens Boots Alliance passed the $1 billion mark during its fourth quarter, which easily surpassed expectations on Wall Street. However, the largest drugstore chain in the U.S. also said it would delay its closing to take over Rite Aid.

On Thursday, Walgreens said that it was expecting to close on its purchase for $9.4 billion of Rite Aid Corp early in 2017, rather than before the end of this year.

It revealed its plans to purchase the third largest U.S. drugstore chain almost one year ago, a combination which could create a chain that has over 12,000 locations in the U.S. that would be several thousand more compared to its biggest rival CVS Health.

The takeover is still under review by U.S. federal regulators who of late are taking a much more aggressive stance when it comes to major acquisitions and in certain instances denying them.

Walgreens announced that as recently as September, it was expecting to close on its Rite Aid deal at some point during the current calendar year. However, at that time it said it might have to divest or sell over 500 of its stores.

The company previously has said it was expecting to divest 500 or even fewer stores to make the deal work. Officials from the company said it remained actively engaged with members of the Federal Trade Commission regarding its review of the pending deal.

During its most recent three-month period, Walgreen earned just over $1.03 billion, while its results that were adjusted for gains as well as costs that were one-off reached $1.07 a share.

Analysts were expecting the company to reach earnings per share of 99 cents.

Walgreens Boots Alliance posted $28.64 billion in revenue for the quarter, which came up shy of forecasts on Wall Street of $29.18 billion.

The company, which is based in Deerfield, Illinois, said on Thursday as well that it is expecting its fiscal earnings for the full year of 2017 to range between a share price of $4.85 and $5.20.

That particular range straddled expectations of Wall Street that were for $5.03 a share.

Shares of Walgreens during 2016 have dropped slightly more than 9% since the start of 2016. Shares have dropped in price by 13% over the past 12 months.

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