Walgreen Misses Mark, Profit Drops 11%, Stock Tanks
4 February 2011Drugstore chain operator Walgreen on Tuesday posted a smaller-than-expected fiscal third-quarter profit, partially hampered by one-time charges.
The Deerfield, Il.-based company reported fiscal-third-quarter net income of $463 million, or 47 cents per share, compared with $522 million, or 53 cents per share, in the year-ago period. The latest quarterly results included one-time items totaling 7 cents per share, so adjusted profit came to 54 cents per share in the period. Overall sales rose 6.1% from last year, to $17.2 billion.
On average, Wall Street analysts expected a higher adjusted profit of 57 cents per share, on nearly matching revenue of $17.14 billion.
Walgreen shares tumbled 6.5% in Tuesday trading.
The Bottom Line
We removed shares of WAG from our "recommended" list back on Nov.17, when the stock was trading at $39.40. The company has a dividend yield of 1.82%, based on last night's closing stock price of $30.14. The stock has technical support in the $26-$28 price area. If the shares can firm up, we see overhead resistance around the $32-$34 price levels. We would remain on the sidelines for now.
Walgreen is not recommended at this time, holding a Dividend.com DARS Rating of 3.4 out of 5 stars.