Walgreen Hits Estimates, But GAAP Results Lag Last Year's

Seth Jayson, The Motley Fool
Updated

Walgreen (NYS: WAG) reported earnings on June 19. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended May 31 (Q3), Walgreen met expectations on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank and GAAP earnings per share shrank.


Gross margins improved, operating margins dropped, net margins dropped.

Revenue details
Walgreen tallied revenue of $17.77 billion. The 10 analysts polled by S&P Capital IQ predicted sales of $17.95 billion on the same basis. GAAP reported sales were 3.4% lower than the prior-year quarter's $18.37 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.63. The 22 earnings estimates compiled by S&P Capital IQ anticipated $0.63 per share. GAAP EPS of $0.62 for Q3 were 4.6% lower than the prior-year quarter's $0.65 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 28.2%, 10 basis points better than the prior-year quarter. Operating margin was 4.9%, 40 basis points worse than the prior-year quarter. Net margin was 3.0%, 30 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $17.41 billion. On the bottom line, the average EPS estimate is $0.58.

Next year's average estimate for revenue is $71.86 billion. The average EPS estimate is $2.62.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 2,105 members out of 2,256 rating the stock outperform, and 151 members rating it underperform. Among 523 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 488 give Walgreen a green thumbs-up, and 35 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Walgreen is hold, with an average price target of $36.82.

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The article Walgreen Hits Estimates, But GAAP Results Lag Last Year's originally appeared on Fool.com.

Seth Jaysonhad no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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