Walgreens Boots Alliance Inc.'s fiscal third-quarter earnings jumped more than 15 percent and beat Wall Street expectations despite flat sales from the drugstore chain's U.S. pharmacies.
The newest component of the Dow Jones industrial average also said today that its board authorized a $10 billion stock buyback, and that it was raising the lower end of its earnings forecast for fiscal 2018 by 5 cents per share.
For the three months ended May 31, Walgreens earned $1.34 billion, up from $1.16 billion a year earlier. Adjusted earnings totaled $1.53 per share. Revenue for the Deerfield-based company climbed 14 percent to $34.33 billion.
Analysts forecast earnings of $1.47 per share on $33.65 billion in revenue, according to a poll by Zacks Investment Research.
Walgreens is the nation's largest drugstore chain and has more than 13,200 stores globally. In the third quarter, the company completed the purchase of nearly 2,000 stores it purchased from rival Rite Aid, a deal that Walgreens says will not significantly affect its fiscal 2018 adjusted earnings.
The addition of Rite Aid stores helped Walgreens' U.S. pharmacy sales jump 19 percent in the quarter. But sales from stores open at least a year remained unchanged. That's an important metric for retailers because it eliminates the impact of recently opened or closed locations.
Walgreens now foresees fiscal 2018 adjusted earnings in a range of $5.90 to $6.05 per share. Analysts expect $5.95 per share, according to a FactSet survey.
The company also announced on Thursday that it is raising its quarterly dividend by 4 cents to 44 cents per share. The new dividend will be payable Sept. 12 to shareholders of record as of Aug. 20.
Shares dropped 8.7 percent in premarket trading.