Rite Aid acquisition still expected to close early this year

DEERFIELD, Ill. — Walgreens Boots Alliance (WBA) edged past Wall Street’s adjusted earnings per share forecast in its fiscal 2017 first quarter despite declined sales and net income.

WBA also reported Thursday that it’s still working to finalize its $17 billion deal to acquire Rite Aid Corp. and continues to expect to complete the transaction in early 2017.

For the first quarter ended Nov. 30, WBA’s sales dipped 1.8% to $28.5 billion from $29.03 billion a year earlier. Revenue for the quarter, however, was up 1.1% on a constant currency basis, the company noted.

Net earnings attributable to WBA, on a GAAP basis, fell to $1.05 billion, or 97 cents per diluted share, in the first quarter from $1.11 billion, or $1.01 per diluted share, a year ago. The company attributed the decrease mainly to a lower impact of UK tax rate reductions.

WBA said adjusted earnings in the quarter came in at $1.2 billion, or $1.10 per diluted share, compared with $1.13 billion, or $1.01 per diluted share, in the prior-year period.

Analysts, on average, had projected adjusted EPS of $1.09, with estimates ranging from a low of $1.01 to a high of $1.15, according to Thomson Reuters.

“Overall, we are pleased with the progress this quarter, with results in line with our expectations. We continue to anticipate that growth in the second half of fiscal 2017 will reflect the new strategic pharmacy partnerships we announced last year,” executive vice chairman and chief executive officer Stefano Pessina said in a statement, referring to WBA’s agreements with Prime Therapeutics, OptumRx and Express Scripts-TRICARE. “As a result, we have raised the lower end of our fiscal year guidance by 5 cents per share. In addition, we continue to work toward closing the pending acquisition of Rite Aid Corp. in the early part of this calendar year.”