) is set to report third-quarter fiscal 2013 results before the
opening bell on Tuesday, Jun 25. In the second quarter, this drug
retail giant posted a 1.05% positive earnings surprise after two
consecutive misses. Let's see how things are shaping up prior to
Factors to Consider this Quarter
As reported earlier, Walgreens' total sales came in at $18.34 in
the third quarter of fiscal 2013. Despite sales growth of 3.3%
year over year, the quarterly sales trailed the Zacks Consensus
Estimate for the fifth time in a row.
Nonetheless, the company witnessed higher comparable store sales
and front-end comparable store sales. Additionally, comparable
pharmacy sales improved in the third quarter.
As it crossed the halfway mark of fiscal 2013, things started
looking up for Walgreens. Following the reconciliation with
Express Scripts Holding Company
), Walgreens is sanguine about increasing returns of customers.
This is reflected in the higher number of prescriptions filled at
the company's comparable stores in the third quarter.
Walgreens' timely progress to deliver first-year synergy targets
following its Alliance Boots deal in encouraging. Notably, the
company's third-quarter numbers will reflect whether its
deal-making spree is paying off.
However, the generic wave in the pharmaceutical industry
continues to hurt revenues. The company also faces tough industry
conditions and competitive headwinds.
Our proven model does not conclusively show that Walgreens will
likely beat earnings estimates this quarter. That is because a
stock needs to have both a positive Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) as well as a Zacks Rank of #1, 2 or 3 for this to happen. This
is not the case here as you will see below.
Zacks Earnings ESP:
The Most Accurate Estimate stands at $0.90 while the Zacks
Consensus Estimate is also at $0.90. This comes to a difference
Zacks Rank #3 (Hold):
Walgreens carries a Zacks Rank #3 (Hold), which increases the
predictive power of ESP. However, the Zacks Rank #3 when combined
with a 0.00% ESP makes surprise prediction difficult.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows that these have the right combination of ingredients
to post an earnings beat this quarter:
), Earnings ESP of +2.13% and a Zacks Rank #1 (Strong Buy)
), Earnings ESP of +4.84% and a Zacks Rank #3 (Hold)
EXPRESS SCRIPTS (ESRX): Free Stock Analysis
HAEMONETICS CP (HAE): Free Stock Analysis
RESMED INC (RMD): Free Stock Analysis Report
WALGREEN CO (WAG): Free Stock Analysis Report
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