Reading through Walgreen's
Sales growth? Check. Earnings growth? Check. Comps growth? Check. Well, check them again. The increases this quarter, while substantial, were a bit slimmer than the moves made in the second quarter. Still, there's little for shareholders to complain about.
Revenues grew 15% over the prior-year quarter to $9.6 billion, with prescriptions leading the way at a 17% clip. Comps were up a respectable 10%, with slight improvement in gross margins and administrative expenses; earnings came in 14% higher, at $0.33 per share. That was enough to beat analysts' expectations by a penny.
Investors are giving the results the financial equivalent of the golf clap, sending shares up around 2%, a couple of bucks off the 52-week high. The lukewarm response is likely owed to the present valuation of the firm: Shares currently trade at nearly 30 times trailing earnings. Earnings gains are estimated to be in the 15% range.
Walgreen is doing a solid job, but with competition from the likes of CVS
Interested in more Fool coverage of the drug biz?
- See why drug reimportation won't work.
- Watch CVS tweak the noses of big pharma players like Merck
(NYSE:MRK)and Pfizer (NYSE:PFE).
- Will CVS be the biggest or the best?
Mathew Emmert's Motley Fool Income Investor serves up solid players like Walgreen that pay better dividends.