Pharmacy chain operator Walgreen Company (
) on Tuesday posted in-line fiscal third quarter earnings,
announced a partnership with a European pharmacy chain, and
increased its quarterly dividend payout by 22%.
The Deerfield, IL-based company reported fiscal third quarter
net income of $537 million, or 62 cents per share, compared with
$603 million, or 65 cents per share, in the year-ago period.
Revenue fell 3% from last year to $17.75 billion.
On average, Wall Street analysts expected a matching profit of
62 cents per share, on higher revenue of $17.87 billion.
In a separate announcement, WAG said it would spend $6.7 billion
in cash and stock to buy a 45% equity ownership stake in European
pharmacy chain Alliance Boots. In pursuant to the deal, Walgreen
retains the option to purchase the remaining 55% stake in Alliance
Boots in about three years.
The company's board of directors also approved a 22% increase in
its quarterly dividend payout. The new dividend of 27.5 cents per
share (up from 22.5 cents) will be paid on Sept. 12 to shareholders
of record as of Aug. 17. The ex-dividend date is Aug. 15.
Walgreen shares fell 66 cents, or -2.1%, in premarket trading
The Bottom Line
Shares of Walgreen Company (
) will now have a 3.44% dividend yield, based on the higher
dividend payout and last night's closing stock price of $31.96. The
stock has technical support in the $28-$30 price area. If the
shares can firm up, we see overhead resistance around the $34-$36
Walgreen Company (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.3 out of 5 stars.
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