Walgreens Boots Alliance Q1 profits beat expectations, slashes dividend

Retailer Walgreens Boots Alliance reported higher-than-anticipated quarterly profits on Thursday as higher drug prices and cost-cutting efforts gave it a boost, while its move to almost half its dividend payout helped accelerate savings.

Walgreens Boots Alliance slashed its dividend payment by 48% to $0.25 per share as its US retail pharmacy wing pulled in revenues of $28.94bn in the first quarter, coming in ahead of analysts' estimates for a reading of $27.26bn. Its healthcare services unit reported revenues of $1.93bn, compared to the $2.03bn expected on the Street.

On an adjusted basis, Walgreens posted quarterly earnings per share of $0.66 per share for the quarter, ahead of estimates of $0.61 per share, driven by a 13.1% increase in same-store sales at its US retail pharmacies as a result of higher drug prices and solid execution in pharmacy services.

Chief executive Tim Wentworth said WBA's performance was thanks to a "disciplined execution in a challenging consumer backdrop".

"We are evaluating all strategic options to drive sustainable long-term shareholder value, focusing on swift actions to right-size costs and increase cash flow," Wentworth said.

As of 1255 GMT, Walgreens Boots shares were up 3.40% in pre-market trading at $26.44 each.

Reporting by Iain Gilbert at Sharecast.com