Walgreen Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Walgreen (NYSE:WAG) will unveil its latest earnings on Friday, September 28, 2012. Walgreen operates a chain of retail drug stores.

Walgreen Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 56 cents per share, a decline of 1.8% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 58 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 56 cents during the last month. For the year, analysts are projecting profit of $2.59 per share, a decline of 1.9% from last year.

Past Earnings Performance: Last quarter, the company met expectations by reporting net income of 62 cents per share last quarter. In the previous second quarter, the company beat estimates by one cent.

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Stock Price Performance: Between June 28, 2012 and September 24, 2012, the stock price rose $6.63 (22.8%), from $29.04 to $35.67. The stock price saw one of its best stretches over the last year between June 1, 2012 and June 12, 2012, when shares rose for eight straight days, increasing 4.4% (+$1.32) over that span. It saw one of its worst periods between February 22, 2012 and March 2, 2012 when shares fell for eight straight days, dropping 4.7% (-$1.60) over that span.

A Look Back: In the third quarter, profit fell 10.9% to $537 million (62 cents a share) from $603 million (65 cents a share) the year earlier, meeting analyst expectations. Revenue fell 3.4% to $17.75 billion from $18.37 billion.

Wall St. Revenue Expectations: Analysts are projecting a decline of 4.5% in revenue from the year-earlier quarter to $17.16 billion.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 6.5% in the fourth quarter of the last fiscal year, 4.7% in the first quarter and 0.8%in the second quarter before dropping in the third quarter.

After experiencing income drops the past three quarters, the company is hoping to use this earnings announcement to rebound. Net income fell 4.5% in the first quarter, by 7.6% in the second quarter and again in the third quarter.

Analyst Ratings: There are mostly holds on the stock with 10 of 19 analysts surveyed giving that rating.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.54 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.55 in the second quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 3.4% to $7.5 billion while assets rose 3.2% to $11.57 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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