Walgreens Boots Alliance (NASDAQ: WBA) shares went for a steep drop Thursday morning as investors dug into the company's third-quarter earnings results.
The drugstore chain posted revenue of $34.33 billion, topping analysts polled by Thomson Reuters' estimates of $34.05 billion. In the quarter, Walgreens said its net income was $1.34 billion, or $1.35 per share.
After stripping out items, Walgreens earned $1.53 per share beating expectations of $1.48 per share.
The company announced a $10-billion share buyback, helping boost the new Dow Jones Industrial Average component Walgreens' stock turned negative as investors dove deeper into the results. Shares lost $6.26, or 9.5%, to $60.00 early in Thursday's session.
CEO Stefano Pessina said, "I am pleased that, in what has been a challenging environment, we have again delivered solid earnings per share growth combined with healthy cash flow."
In the quarter, Walgreens' comparable pharmacy sales in the U.S. were flat compared to the year-ago quarter. The company said prescription brand inflation was offset by reimbursement pressure and generic drugs.
Comparable retail sales in the U.S. slid 4% in the quarter. Drugstores have struggled to keep up as Amazon (NASDAQ: AMZN) and other retailers steal away consumers who can find the same items, often at less expensive prices.
Walgreens' gross margin decreased to 22.9% in the quarter from 24.2% in the same time last year, falling short of analysts' expectations of 23.5%. Its adjusted operating margin dipped to 5.3% from 6%, shy of the consensus estimate of 5.7%.
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