The Deerfield, Ill., drugstore chain posted net income attributable to Walgreens of $883 million, compared with $1.03 billion a year earlier. Earnings from continuing operations were $1.02 a share, compared with $1.06 in the year-ago period. Adjusted for one-time items, earnings were $1.59 a share. Analysts surveyed by FactSet were looking for adjusted earnings of $1.37.
An Omicron-led surge in COVID-19 cases during the second quarter had boosted demand for vaccines and testing at Walgreens. But testing has slowed since January, Walgreens executives said, adding it remains a steady source of business as travel resumes.
Despite the rise of the highly transmissible Omicron sub-variant BA.2, health experts in the United States believe a new wave of infections appears unlikely as overall cases are declining from January's record highs.
Walgreens expects low-single digit growth in profit for 2022, implying it would earn between $1.69 and $1.79 per share in the second half of the year versus consensus estimates of $1.97, according to Evercore ISI.
The company said its cautious forecast was due to increasing investments in its Walgreens Health unit, which it created earlier in fiscal year 2022.
"These new investments, paired with tough sales and profit comparisons from last year's COVID-19 activities, could keep sales and profit growth muted for a while, assuming no pandemic resurgence," said Edward Jones analyst John Boylan.
Walgreens has forecast 30 million vaccinations this year at its sites. In the second quarter ended Feb. 28, it administered about 11.8 million doses of vaccine and sold 6.6 million tests.
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