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Walgreens Boots Tops Q1 Earnings Forecast, Sees 2021 Growth Despite Pandemic Challenges

Walgreens said averse impacts from the pandemic hit its first quarter earnings, but held to its growth forecast of the 2021 financial year.

Walgreens Boots Alliance  (WBA) - Get Walgreens Boots Alliance Inc. Report posted stronger-than-expected first quarter earnings Thursday thanks in part to a solid rise in U.S. retail pharmacy sales. 

Walgreens said GAAP earnings for the three months ending in November, the Dow component's fiscal first quarter, were pegged at $1.22 per share, down 11% from the same period last year but firmly ahead of the Street consensus forecast of $1.04 per share.  Group revenues, Walgreens said, rose 5.7% to $36.3 billion, again topping analysts' estimates of a $35 billion tally.

Walgreens Boots reiterated its adjusted profit forecast for the 2021 year, estimating profits should grow in the "low single-digit' percentage range, although the first half of the year will be negatively impacted by the ongoing coronavirus pandemic.

"Our first quarter results exceeded expectations as we continue to deliver on our strategic priorities. As announced yesterday we have taken a major step forward in our transformation; we are divesting our pharmaceutical wholesale business with plans to use the proceeds to accelerate our investments in healthcare," said CEO Stefano Pessina. "While the business environment remains challenging, we are rising to the occasion with agility and discipline and we are confident in our outlook for adjusted EPS for the fiscal year."

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"Our role in the healthcare system has never been more important, as the communities we serve continue to turn to our trusted brands and expert pharmacists," he added. "I am so proud of our teams and the historic and critical role they are playing to help the world emerge from the pandemic, administering COVID-19 vaccinations to frontline healthcare workers and vulnerable members of our society."  

Walgreens shares were marked 1.1% higher in early trading following the earnings release to change hands at $43.50 each.

Walgreens Boots Alliance agreed Wednesday to sell its healthcare distribution business to AmerisourceBergen Corp.  (ABC) - Get AmerisourceBergen Corporation Report for around $6.5 billion. 

Walgreens said the majority-cash deal will allow it to focus on its core retail pharmacy business while strengthening and expanding its partnership with AmerisourceBergen. Walgreens will receive $6.275 billion in cash and 2 million shares in AmerisourceBergen common stock for the sale of its Alliance Healthcare business, the companies said.