Walgreens Boots Alliance (WBA) Tops Q4 EPS by 8c; Guides FY17 EPS

Walgreens Boots Alliance (NASDAQ: WBA) reported Q4 EPS of $1.07, $0.08 better than the analyst estimate of $0.99. Revenue for the quarter came in at $28.6 billion versus the consensus estimate of $29.06 billion.

Rite Aid Acquisition

Walgreens Boots Alliance’s pending acquisition of Rite Aid Corporation, which was announced 27 October 2015, is progressing as planned. The transaction is subject to the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions.

As announced on 8 September 2016, Walgreens Boots Alliance remains actively engaged with the Federal Trade Commission (FTC) regarding its review of the pending acquisition, and continues to expect that the most likely outcome will be that the parties will be required to divest between 500 and 1,000 stores. The company believes that it will be able to execute agreements to divest these stores to potential buyers, pending FTC approval, by the end of calendar year 2016, and now expects its acquisition of Rite Aid will close in early calendar 2017.

Taking into account its current expectation of store divestitures, Walgreens Boots Alliance continues to expect that the acquisition will be accretive to its adjusted diluted net earnings per share in the first full year after closing of the transaction. The company also continues to expect that it will realize synergies from the acquisition in excess of $1 billion, to be fully realized within three to four years of closing. These synergies have been updated where practicable and, as previously disclosed, are expected to be derived primarily from procurement, cost savings and other operational matters.

GUIDANCE:

Walgreens Boots Alliance sees FY2017 EPS of $4.85-$5.20, versus the consensus of $5.03.

For earnings history and earnings-related data on Walgreens Boots Alliance (WBA) click here.

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