Drugstore chain Walgreen’s 4Q net income falls 55 per cent, adjusted results top expectations by News Staff Posted Sep 28, 2012 9:38 am MDT AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email Walgreen Co.’s fiscal fourth quarter net income tumbled 55 per cent compared to a year ago when the drugstore operator recorded a big business sale gain.Its adjusted earnings still trumped Wall Street expectations. But shares of the nation’s largest drugstore chain fell almost 2 per cent in premarket trading Friday.The Deerfield, Ill., company’s stock price had climbed more than 17 per cent in the quarter.Walgreen said Friday that it absorbed a bigger inventory-related charge in this year’s quarter and another charge due to a multi-billion dollar investment in European health and beauty retailer Alliance Boots. Walgreen also took another sales hit from a split with pharmacy benefits manager Express Scripts Holding Co. that shifted customers away from its stores.Overall, Walgreen earned $353 million, or 39 per share, in this year’s quarter. That compares to $792 million, or 87 cents per share, a year ago.Excluding one-time items like the charges, Walgreen earned 63 cents per share. That topped analyst expectations of 55 cents per share, according to FactSet.Revenue fell 5 per cent to $17.1 billion from $18 billion a year ago.Walgreen runs 7,930 drugstores in all 50 states, the District of Columbia, Puerto Rico and Guam, or more than its main competitors CVS Caremark Corp. and Rite Aid Corp.The company announced in June that it planned to branch out overseas with the Alliance Boots investment. That amounted to $4 billion in cash and more than 83 million shares for a 45 per cent ownership stake in the Swiss company, which runs the largest drugstore chain in the United Kingdom. Walgreen took a 9-cents-per-share charge in the quarter from that deal.The company also recorded a “last-in-first-out” inventory charge of 10 cents per share in this year’s quarter compared to 4 cents per share last year.LIFO is a method of accounting for inventory that assumes a company sells its newest inventory first. The company takes a credit or charge each quarter according to the anticipated inflation rate for the year.Last year’s quarter also included an after-tax gain of 30 cents per share, due to the pharmacy benefits management business sale.Pharmacy benefits managers, or PBMs, run prescription drug plans for employers, insurers and other clients.Walgreen and St. Louis-based Express Scripts, the nation’s largest PBM, had stopped doing business last year after months of talks failed to produce a new contract, and Walgreen’s sales have dropped for several months because of this. The companies have since agreed to a new contract, but it didn’t start until Sept. 15, or after the fiscal fourth quarter ended.Walgreen rivals CVS Caremark and Rite Aid have both claimed new customers due to this stand-off, and Walgreen said it took a hit of about 6 cents per share in the quarter due to the dispute.For the full fiscal year, Walgreen earned $2.13 billion, or $2.42 per share, on $71.63 billion in revenue.Walgreen shares fell 72 cents, or 2 per cent, to $35.88 in premarket trading.
Two children were killed alongside their mother in a horror car smash moments after two separate cars were seen apparently racing nearby.Sanjay and Pawanveer Singh, aged 10 years and 23 months old, were passengers in a BMW car with their mother, when they were caught up in what one witness described as a “massive” multi-vehicle smash.Three cars, also including a Bentley and an Audi S3, were involved in the collision on the Birmingham New Road at the junction with Lawnswood Avenue in Wolverhampton at 8.45pm on Thursday, West Midlands Police said.The driver of the Bentley car, a 31-year-old man, has been arrested on suspicion of causing death by dangerous driving. He has been released pending further investigation. The Audi driver has not been traced.A picture of Sanjay happily holding his younger brother in front of a Christmas tree was released by police alongside a tribute from their family. They said: “Our family are grieving over the tragic deaths of our two beautiful children, as well as dealing with the shock of the horrific crash. “We appeal to the general public to come forward as witnesses in order help police find the perpetrator who fled from the scene and to bring him or her to justice. Want the best of The Telegraph direct to your email and WhatsApp? Sign up to our free twice-daily Front Page newsletter and new audio briefings. “It was too much. The mother was just in shock.”Eyewitness Dudley Hartley said police quickly cleared the area and moved onlookers away – after immediately realising the severity of the children’s injuries.Mr Hartley, who went outside to see if he could help at the scene, said: “It was absolutely shocking. To see something of this nature and then to discover there were two fatalities, both children, is shocking.”Accident investigators were on the scene overnight, where the blue Audi could be seen with a crumpled front end. “At this time we would appreciate some privacy and space to grieve over our precious loss. “Your co-operation in this would be very much appreciated.”Witnesses claim the driver appeared distressed after being accused of racing with the Audi, which struck the family car at traffic lights on a dual carriageway.Police are attempting to find the Audi driver, who left on foot.Passersby rushed to the scene in an attempt to help the victims and comfort and treat their mother.A spokesman for West Midlands Ambulance Service said: “Unfortunately, it soon became apparent that nothing could be done to save the two young boys who had been badly hurt and they were confirmed dead at the scene.”The mother was taken to hospital seriously injured.A taxi driver told reporters two cars had passed him at a “very, very fast” speed about a mile away from the accident scene.Describing how two cars had passed him at speed, Tanveer Hussain added: “I was further up the road, by McDonald’s, and two cars overtook me. If I am doing 35 to 40, they were doing much more.”Explaining what happened after he heard a bang and then saw the crash site, Mr Hussain added: “I got out of my car and other lads tended to the children. What I saw was terrible.