Confirmed cases of the coronavirus are rising across Europe and many U.S. states, raising fears that a winter wave of COVID-19 will force renewed stay-at-home and lockdown orders that cripple the economic recovery.

The recovery is already fragile and uneven: Initial claims for state unemployment benefits for the week ended Oct. 10 increased to 898,000, still far higher than pre-pandemic levels. The Dow Jones Industrial Average (DJINDICES:^DJI) was down around 0.9% at 10:50 a.m. EDT Thursday.

Shares of Walgreens Boots Alliance (NASDAQ:WBA) managed to gain despite the weak market after the drugstore chain reported solid quarterly results and guided for earnings growth next year. Meanwhile, a flurry of cloud deals from International Business Machines (NYSE:IBM) wasn't enough to save the stock from riding the market lower.

A Walgreens store.

Image source: Walgreens.

Walgreens delivers earnings beat

Sales were up and profits were down for drugstore chain Walgreens in its fiscal fourth quarter as key markets in the U.S. and the U.K. gradually improved. Revenue jumped 2.3% to $34.7 billion, beating analyst expectations by $390 million, while adjusted earnings per share dropped 28% to $1.02. While EPS was down, the adjusted figure was $0.06 ahead of the average analyst estimate.

Sales in the U.S. retail pharmacy business jumped 3.6% to $27.0 billion in the fourth quarter despite store closings. Prescriptions filled rose 1.6% as prescription volume trends improved, although the company says it lost some retail-prescription market share during the quarter.

The international retail pharmacy business didn't fare as well, with sales slumping 14.9% to $2.3 billion. Comparable-store sales at Boots U.K. plunged 29.2% as customer visits to stores remained depressed, particularly in locations tied to train stations, airports, and busy shopping streets. One silver lining: E-commerce sales for Boots increased 155% during the quarter, partly offsetting the in-store weakness. E-commerce was also strong in the U.S., with Walgreens.com sales soaring 39%.

The pharmaceutical wholesale business helped drive total sales higher with a 4.3% revenue increase to $6.0 billion. This growth was driven by emerging markets, Germany, and France. Turning to the bottom line, earnings were down due to the pandemic, lower U.S. pharmacy gross profit, and changes to bonuses. Walgreens estimates that COVID-19 reduced its adjusted EPS by $0.46.

Looking to 2021, the company expects the impact of the pandemic on the bottom line to gradually decrease. Adjusted EPS is expected to rise by a low single-digit percentage next year, with strong growth expected in the second half of the year. That second-half growth will be driven by the expected waning of pandemic impacts and investments in omnichannel capabilities.

Shares of Walgreens were up about 3% Thursday morning, even as the broader market slumped. The stock is still down around 37% since the start of the year.

IBM strikes cloud deals

Tech giant IBM made a few notable announcements on Thursday related to its cloud, artificial intelligence (AI), and blockchain businesses:

  • It announced a teleconsultation solution running on IBM Cloud developed with Santa Casa da Misericordia de Lisboa, a Portuguese charitable organization. The cloud-based platform will allow patients to schedule and access teleconsultation services and remote medical care from their phones while reducing the need to travel for care.
  • The company has built a disaster recovery site using IBM Cloud for the on-premises data center of Kazakhstan copper producer KAZ Minerals. The solution, which is built using IBM Cloud bare-metal servers, automates the process of migrating, recovering, and testing virtual machine workloads. Using IBM's cloud allows KAZ Minerals to avoid the additional capital spending associated with setting up an on-premises system.
  • The Mediterranean Shipping Company and French company CMA CGM are now integrated into TradeLens, a blockchain-based platform running on IBM Cloud that aims to digitize the global shipping industry. The TradeLens ecosystem now includes over 175 organizations, and the platform has tracked 30 million container shipments, 1.5 billion events, and 13 million published documents.
  • IBM and ServiceNow announced that they've expanded their strategic partnership. A new joint solution will be available this year that, according to the announcement, combines "IBM's AI-powered hybrid cloud software and professional services to ServiceNow's intelligent workflow capabilities and market-leading IT service and operations management products."

IBM made headlines last week when it announced it was spinning off its vast infrastructure services business. The move will allow IBM to deepen its focus on hybrid cloud computing, AI, and other areas that offer long-term growth potential.

Shares of IBM fell along with the market on Thursday, down 1.1% in the morning. The stock has lost roughly 7% of its value this year.