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Alberto Abaterusso
Alberto Abaterusso
Articles (1669) 

Walgreens Boots Alliance Falls on 2nd-Quarter Results

The company misses consensus estimates on earnings and revenues

April 02, 2019 | About:

Shares of Walgreens Boots Alliance Inc. (NASDAQ:WBA) fell 2.32% to $62.02 in pre-market trading on Tuesday, after the company released disappointing results for its second fiscal quarter of 2019 resulting from negative macro trends and challenging U.S. and U.K. markets.

Based in Deerfield, Illinois, the pharmaceutical retailer reported a 5.2% year-over-year decrease in non-GAAP earnings of $1.64 per share, missing expectations by 8 cents. GAAP earnings were $1.24 per share in the quarter, reflecting a nearly 9% decline.

Revenue was $34.53 billion, which was 4.6% growth year-over-year, missing consensus estimates by $40 million.

Second-quarter revenues were contributed from the following business segments: retail pharmacy U.S. sales jumped 7.3% to $26.26 billion, retail pharmacy international declined 7.1% to $3.08 billion and pharmaceutical wholesale slid 0.3% to $5.74 billion.

Other important numberswere a 23.3% decrease in operating income to $1.5 billion and a 10.4% decrease in adjusted operating income to $1.9 billion. Walgreens Boots Alliance also noted a 67% fall in net operating cash flow to $735 million and 79% drop in free cash flow to $411 million.

Looking ahead to full fiscal 2019, Walgreens Boots Alliance expects flat earnings growth at constant currency rates.

The share price of Walgreens Boots Alliance was around $63.5 at close on Monday following a 1% increase for the 52 weeks through April 1. The share price is abundantly below the 200-, 100- and 50-day simple moving average lines. The 52-week range is $59.07 to $86.31 and the market capitalization is roughly $95.9 billion.

The 14-day Relative Strength Indicator of 45.48 suggests the stock is neither oversold nor overbought.

Wall Street issued a hold recommendation rating with an average target price of $76.62 per share of Walgreens Boots Alliance.

Disclosure: I have no positions in any security mentioned.

About the author:

Alberto Abaterusso
If somebody asks what being a value investor means, Alberto Abaterusso would answer, “The value investor is not just the possessor of the security that represents the company, but he is the owner of that company. As an owner of the company the value investor is actively involved in the dynamics of that company and his first concern is how to have sales progressively growing. Also, the value investor is probably one of the most demanding persons in the world concerning sales.”

Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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