Walgreen quarter comes in with 25% spurt in earnings

RadioShack's profit up, but less than expected

January 04, 2003|By BLOOMBERG NEWS

Walgreen Co.'s first-quarter earnings rose 25 percent as the largest U.S. drugstore chain added stores and increased sales of prescription drugs.

Net income of $231.6 million, or 22 cents a share, compared with $185.9 million, or 18 cents, a year earlier, the company said. Sales in the quarter that ended Nov. 30 increased 14 percent to $7.48 billion from $6.56 billion.

Walgreen boosted spending on promotions to keep customers from switching to rivals such as Wal-Mart Stores Inc., supermarket chain Safeway Inc. and drugstore chains offering discounts. The company opened 92 stores and boosted sales of higher-margin generic drugs as it added pages to advertising circulars and lowered prices on some items.

Excluding a pretax gain from litigation of $16.7 million, Walgreen would have earned 21 cents a share. On that basis, analysts had expected profit to be 20 cents a share.

RadioShack Corp.

The No. 3 U.S. electronics retailer said its fourth-quarter profit rose less than forecast because sales of mobile telephones and radio-controlled toys missed holiday projections.

Profit was about 58 cents to 60 cents a share, compared with an earlier estimate of 63 cents to 68 cents, the company said in a statement. RadioShack said it still expects per-share profit to increase as much as 15 percent annually from 2003 to 2005.

RadioShack said its sales of Sprint Corp. PCS phones and service contracts, batteries for some toys, and DVD-player accessories were weaker than expected. Electronics sellers from Tweeter Home Entertainment Group Inc. to Best Buy Co. and Circuit City Stores Inc. had already cut their forecasts amid slow sales and competition from low-price chains such as Wal-Mart.

RadioShack had been expected to earn 65 cents in the fourth quarter, $1.49 last year and $1.66 in 2003. Net income was $35.2 million, or 18 cents a share, in the year-earlier fourth quarter and $166.7 million, or 85 cents, in 2001.

RadioShack, which trails Best Buy and Circuit City in sales, is to report fourth-quarter sales Jan. 14.

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