Walgreens Boots Alliance Inc. (NASDAQ:WBA) reported third-quarter earnings Thursday that beat Wall Street analyst estimates. The drugstore chain also plans to purchase as much as US$10bn in a stock buyback and raise its dividend.
The drugstore chain posted third-quarter earnings of US$1.53 per share on revenue of US$34.3 billion. This handily beat the consensus earnings estimate of US$1.47 per share on revenue of US$33.7bn. Revenue grew 14% on a year-over-year basis.
Walgreens said its effective tax rate in the quarter fell to 7.6%, compared with 12.4% in the same quarter a year before.
Despite the good news, shares were down 5% to US$62.95.
Massive share buyback
“US companies have been buying back their shares at an aggressive pace, raising questions about the way that the new corporate tax cuts are being used,” according to a Wall Street Journal story. Large US companies have announced more than US$200bn in repurchases in the past three months, per the report.
Walgreens also raised its quarterly dividend to US$0.44 from US$0.40. The 10% dividend hike is higher than those the drugstore company has implemented in recent years.
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