WALL STREET JOURNAL.
Walgreens to Buy Back $10 Billion in Shares, Raises Dividend
becomes the latest company to return additional capital to
investors following new U.S. tax law
Walgreens said it will buy back as much as $10 billion in stock
and raised its dividend, while reporting stronger sales and
profits in its third quarter.
Photo: Joe Raedle/Getty
Updated June 28, 2018 8:21 a.m. ET
Alliance Inc. plans to repurchase as much as $10 billion of
its shares and raised its dividend, as the drugstore chain and newest
Dow component becomes the latest company to return additional capital
to investors following the new U.S. tax law.
U.S. companies have been buying back their shares at an aggressive
about the way that the new corporate tax cuts are being used.
Walgreens, which also on Thursday reported stronger sales and profits
in its third quarter, said its effective tax rate was 7.6%, compared
with 12.4% in the same quarter a year before.
Health-care companies have pledged to work to reduce rising drug
prices. For Walgreens, comparable
in the U.S. was flat in its latest quarter, as higher
prices on branded drugs were offset by reimbursement pressures and the
impact of generic drugs. Comparable pharmacy sales decreased 1.7%
Comparable retail sales fell 3.8% in the U.S. and 1.3% on a
constant-currency basis internationally.
Electric Co. in the Dow Jones Industrial Average this week,
has expanded in recent years by
merging with European
drug wholesaler Alliance Boots and
buying up stores from
rival Rite Aid Corp. The company, whose roots date back to
1901, has more than 13,200 stores across 11 countries.
Walgreens raised its quarterly dividend to 44 cents from 40 cents. The
10% dividend increase is higher than those the company has implemented
in recent years.
The company also increased the low end of its earnings guidance for
the year by 5 cents a share. It now expects earnings per share of
$5.90 to $6.05.
In all for the third quarter, Walgreens posted a profit of $1.34
billion, or $1.35 a share, compared with a profit of $1.16 billion, or
$1.07 a share, in the year-ago period. On an adjusted basis, earnings
per share came in at $1.53, above the $1.48 expected by analysts
polled by FactSet.
Bolstered by the acquisition of
stores, sales rose 14% to $34.33 billion. Analysts had expected the
company to report $34.1 billion in sales.
Walgreens shares were flat in premarket trading.
Austen Hufford at