Walgreen (WAG) Slumps Amid Q4 Beat: CFO Says No Express Scripts (ESRX) Contract Will Be Negative to Earnings
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After trading higher in pre-open trade following a Q4 beat, Walgreen (NYSE: WAG) shares trended lower Tuesday on comments during the company's quarterly conference call.
Walgreen CFO Wade Miquelon said failure to renew it's contract with Express Scripts (Nasdaq: ESRX) will reduce fiscal 2012 earnings results. Miquelon said losing 75 percent of sales through Express Scripts will reduce fiscal 2012 earnings by 21 cents per share. If half of sales evaporate, earnings will drop by 14 cents, and a 25 percent loss will cut earnings by 7 cents per share.
The drop could be more than just a warning. Walgreen said it has made "no substantial progress" in talks with Express Scripts. The contract, valued at about $5 billion annually, will expire at the end of 2011.
On the other hand, Walgreen CEO Greg Wasson said some companies which Walgreen does business with will want to continue that relationship upon expiration of the contract.
Walgreen shares are down almost 5 percent Tuesday.
Walgreen CFO Wade Miquelon said failure to renew it's contract with Express Scripts (Nasdaq: ESRX) will reduce fiscal 2012 earnings results. Miquelon said losing 75 percent of sales through Express Scripts will reduce fiscal 2012 earnings by 21 cents per share. If half of sales evaporate, earnings will drop by 14 cents, and a 25 percent loss will cut earnings by 7 cents per share.
The drop could be more than just a warning. Walgreen said it has made "no substantial progress" in talks with Express Scripts. The contract, valued at about $5 billion annually, will expire at the end of 2011.
On the other hand, Walgreen CEO Greg Wasson said some companies which Walgreen does business with will want to continue that relationship upon expiration of the contract.
Walgreen shares are down almost 5 percent Tuesday.
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