Walgreen Co., the giant pharmacy that is pushing more into providing health care services beyond the prescription counter, said its first quarter profits jumped 68 percent.
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The jump in profits to $695 million, or 72 cents a share in the quarter ended Nov. 30 compares to $413 million, or 43 cents in the same period in 2012. Revenue rose nearly 6
percent to $18.3 billion.
Despite what company chief executive officer Greg Wasson described as a still “soft economy,” Walgreens benefited from a wave of generic drug introductions to the market as well as cost savings and new revenue from the partnership it and global pharmacy chain Alliance Boots negotiated with wholesaler AmerisourceBergen (ABC). The Alliance Boots relationship alone contributed 14 cents a share to Walgreens’ results.
Prescription sales, which account for nearly 65 percent of Walgreens total sales, rose 7.3 percent.
But Wasson and other Walgreen executives told Wall Street analysts that the company continues to push further into providing more health care services such as vaccines, services in its health clinics and beyond as more Americans gain health insurance coverage from the Affordable Care Act. Walgreen, as well as rivals like CVS/Caremark (CVS) and Wal-Mart (WMT) have been expanding services to become more of a provider of medical care, particularly in the area of primary care services like vaccines, immunizations and treatment of routine maladies.
Wasson said the company wants to bring “more and more services” in addition to pharmacy.
Though Wasson cautioned analysts that it was probably too early to know all the implications from the rollout of the health law, which will begin January 1 providing broader coverage to millions of Americans, he said the company is “well positioned” to serve them.
“We expect the Affordable Care Act to bring more people into the system,” said Kermit Crawford, president of Walgreens pharmacy, health and wellness division. “We are well positioned to serve these patients.”
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