Stocks look set to take another breather in today's session: the Dow Jones Industrial Average (DJINDICES: ^DJI ) has lost 16 points in pre-market trading, suggesting a lower start to the market. The Dow ended just barely in the red yesterday, which broke a six-day win streak for the blue-chip index. Trading volume has been especially light of late. The number of shares that traded hands yesterday, for example, was the ninth lowest of the year. But Walgreen (NASDAQ: WBA ) and Avon Products (NYSE: AVP ) stocks should see heavy trading today after both companies announced news before the opening bell.
Walgreen this morning posted a 7% rise in quarterly profit as earnings per share improved to $0.91 from last year's $0.85 haul. Still, that result was below analysts' forecast for profit of $0.94. The pharmacy retailer's sales also came in slightly below expectations, rising 6% to $19.4 billion. Walgreen saw healthy comparable-store sales growth of 5% in the quarter as it sold more consumables and increased market share in its pharmacy business. However, pharmacy costs grew much faster than revenue, which took a bite out of profitability. CEO Greg Wasson said in a press release that the company tried to hold down its costs, but that, "there is more to be done" in lowering expenses. Walgreen stock has risen 28% this year to trounce the market, but may give back some of those gains today. Shares fell 1.1% in pre-market trading.
Avon announced last night that it is cutting its workforce again. The beauty products giant said that 600 positions are on the chopping block, mostly in its corporate and North American business divisions. The move should cost about $50 million this quarter, but will save roughly the same amount every year going forward. Avon aims to cut a full $400 million from its overhead as a means to reverse a huge slide in profitability: Operating margin has fallen from 11% a few years ago to as low as 2% last quarter. Avon said that with this new round of layoffs it has achieved more than half of its $400 million cost-cutting goal. The stock was up 0.75% in pre-market trading.
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