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Walgreens Tops Q2 Earnings Forecast; Says 2020 Profit Guidance 'Uncertain'

Walgreens will update its 2020 forecasts later this spring, but said second quarter performance "exceeded the company’s expectations."

Walgreens Boots Alliance  (WBA)  posted stronger-than-expected second quarter earnings Thursday and said it's on track to meet its 2020 profit guidance despite the uncertainty linked to the global coronavirus pandemic. 

Walgreens said earnings for the three months ended on February 28, the company's fiscal second quarter, came in at $1.52 per share, down 7.3% from the same period last year but 6 cents ahead of the Street consensus forecast. Group revenues, the company said, rose 3.7% to $35.8 billion. again topping analysts' estimates of a $35.3 billion tally.

Looking into the second half of the group's fiscal year, Walgreens said it will 'continue to closely assess and manage' developments in the coronavirus outbreak, and provide "updates in the next earnings report when both the potential positive and negative effects of the pandemic will be known in more detail." 

However, the Dow component did not scrap its prior guidance of full year earnings that would be flat to last year's $5.99 per share total, with a margin of plus or minus 3%.  

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"We are pleased to report second quarter results exceeding our expectations, with sequential improvement in comparable U.S. prescription volume and retail sales," said CEO Stefano Pessina. "During these unprecedented times of global uncertainty, Walgreens Boots Alliance is on the front lines of combating the COVID-19 pandemic." 

"Our number one priority is to continue to provide essential services, products and information at this critical moment of need, demonstrating our unwavering commitment to our customers and patients, and to our people,” he added.  

Walgreens shares were marked 7.3% lower in early trading following the earnings release to change hands at $39.68 each, a move that would extend the stock's year-to-date decline to around 33%.

Walgreens said international pharmacy sales fell 0.8% from last year, to $3.1 billion, a significant improvement from last quarter's 5.4% slump, while U.S. pharmacy retail sales rose 3.8% to $27.2 billion, again well ahead of last quarter's 1.6% gain.

Same store sales in the U.S., Walgreens said, fell 2.7% thanks in part to a de-emphasis on tobacco products.