Walgreen Profits Miss Target
%mlink(STRY:; PHOTO:; AUDIO:%)
DEERFIELD, Ill. (AP) _ Walgreen Co.’s stock tumbled nearly 11 percent Monday after the nation’s largest drugstore chain reported a rise in earnings that fell short of Wall Street’s expectations.
The company said its third-quarter profit would have been higher but for heavy investment in expansion, which will peak this year after four years of rapid growth. About 475 Walgreens will be opened in 2001 _ an average of one every 18 hours.
Net earnings for the quarter ended May 31 were $213.4 million, or 21 cents a share, up from $193.6 million, or 19 cents a share, a year earlier. That fell a penny short of the estimate of analysts surveyed by Thomson Financial/First Call.
In midday trading on the New York Stock Exchange, the company’s shares were off $4.47, or 10.9 percent, to $36.54.
Sales for the quarter rose 17 percent to $6.3 billion from $5.4 billion a year ago.
The showing partly reflected soaring sales of prescription drugs, which accounted for 59 percent of sales in the quarter and jumped 21 percent. But some sales of other items softened during the quarter.
``In terms of the economy, Walgreens has weathered ups and downs for decades without major impact,″ said company president David Bernauer. ``We don’t call ourselves recession-proof, but we’re certainly recession-resistant.″
The company opened 105 new stores in the quarter and aims to operate 6,000 stores by 2010. As of May 31, it operates 3,424 drugstores in 43 states.
For the first nine months of its fiscal year, Walgreen earned $668.7 million, or 65 cents a share, up from $560.3 million, or 55 cents a share, a year ago.
Revenue rose to $18.34 billion from $15.83 billion a year ago.
On the Net: