What happened
Shares of the pharmacy chain Walgreens Boots Alliance (WBA +0.00%) were rising today after the company reported better-than-expected results for its second quarter. Walgreens beat analysts' average estimates for both its top and bottom lines, boosting investor sentiment in the stock today.
The healthcare stock was up by 3.5% as of 11:08 a.m. ET.
So what
Walgreens reported non-GAAP (generally accepted accounting principles) adjusted earnings per share of $1.16 in the second quarter, which was down 27% but still better than the $1.10 per share that Wall Street was expecting. The company's sales of $34.9 billion in the quarter were up 3% year over year and outpaced analysts' average estimate of $33.5 billion.
NASDAQ: WBA
Key Data Points
Walgreens CEO Rosalind Brewer said in prepared remarks that the company exited the second quarter with "acceleration in February, adding to our confidence in driving strong growth in the second half of the year."
While the company beat analysts' top- and bottom-line estimates in the quarter, Walgreens said that its significant drop in earnings was due to headwinds from lower COVID-19 vaccine and testing demand.
A few other key points from the quarter include:
- U.S. retail pharmacy sales were essentially flat year over year at $27.6 billion.
- International sales increased by 1.6% to $5.7 billion.
- U.S. healthcare revenue more than doubled to $1.6 billion.
Now what
The company maintained its full-year adjusted earnings guidance in the range between $4.45 to $4.65 and said that strong core business growth will offset a slowdown in COVID-19 vaccine and testing demand.
It's no surprise to see Walgreens' stock gaining ground today. Investors across nearly all sectors are paying extra-close attention to a company's quarterly results right now, and have been especially enthusiastic when a company beats Wall Street's consensus estimates.
But Walgreens shareholders should also keep in mind that today's share price bump comes at a time when investors are still trying to figure out what's happening with inflation, the Federal Reserve's interest rate strategy, and fears of a recession. This means today's gains should be held lightly.
