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Walgreens Boots Tops Q4 Earnings Forecast, Sees 2021 Profit Growth Despite Pandemic; Shares Jump

Walgreens Boots said its business will "continue to be negatively impacted when compared with the pre-COVID-19" in the first half of the year, but still forecasts low-single digit profit growth for 2021.

Walgreens Boots Alliance  (WBA)  posted stronger-than-expected fourth quarter earnings Thursday and said profits in the coming year should continue to grow despite the impact of the coronavirus pandemic.

Walgreens Boots said adjusted profits for the three months ending in September, the group's fiscal fourth quarter, were pegged at $1.02 per share, down 28.7% from the same period last year but six cents ahead of the Street consensus forecast. Group revenues, the Walgreens said, rose 2.3% to $34.7 billion, just ahead of analysts' estimates of a $34.37 billion tally.

Comparable U.S. store sales for the group's retail pharmacy business rose 3.6%, Walgreen said, with total revenues also up 3.6% to $27 billion.

Walgreens Boots said adjusted profits for the coming 2021 year 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.

“I am pleased to report results that came in at the high end of our expectations as we continue to adapt and transform our business model to changing customer needs," said CEO Stefano Pessina. "Despite uncertainty amid the global COVID-19 pandemic, we are seeing gradual improvement in key U.S. and UK markets and continued strong performance in our wholesale business. I'm also encouraged by the accelerating growth in our e-commerce platforms."

"Now, more than ever, our pharmacy-centered business is at the heart of community healthcare and we are expanding on that role for the future," he added. "I continue to be inspired by the tireless efforts of our teams as they support and care for our customers, patients and communities, while accelerating progress on our clear set of strategic priorities. Looking ahead, we are projecting adjusted EPS growth in fiscal 2021, as reflected in our new guidance."  

Dow component Walgreens Boots was marked 5.6% higher in early trading following the earnings release to change hand at $37.92, a move that trims the stock's six-month decline to around 12.75%.