Walgreen Co (WAG.N) posted a higher quarterly net profit on Monday, helped by prescription sales and cost controls.
Net profit rose nearly 12 percent to $443 million, or 45 cents per share, in the quarter that ended August 31, compared to $396.5 million, or 40 cents a share a year ago.
The reported quarter's profit included a $79 million benefit tied to a vacation accrual adjustment, Walgreen said.
In the year-ago quarter, Walgreen unexpectedly posted its first quarterly profit decline in almost 10 years due to lower reimbursements for some generic drugs and higher salary and other expenses.
Sales rose 8.8 percent to $14.6 billion.
Sales at stores open at least a year rose 2.6 percent. The company said prescription sales rose 7.9 percent and made up 66 percent of sales in the quarter.
Walgreen said it filled 0.6 percent more prescriptions in stores open at least a year than it did in the year-earlier quarter. It said overall U.S. retail prescription volume fell 1.9 percent in the same period, excluding Walgreen.
"Tough times are forcing people to make tough choices -- delaying doctor visits and prescription use," Walgreen Chief Executive Jeffrey Rein said.
Walgreen has made an unsolicited bid for Longs Drug Stores Corp (LDG.N) to gain more stores, particularly in California and Hawaii. Longs, which has cited possible regulatory hurdles in the Walgreen offer, has already agreed to be bought by CVS Caremark Corp (CVS.N) for $71.50 per share.
Walgreen has said it may go directly to shareholders with its $75-per-share offer if Longs refuses to negotiate.
The company said it expects to open 495 net new stores in fiscal 2009. It operated 6,443 stores as of August 31.
(Reporting by Aarthi Sivaraman in New York and Jessica Wohl in Chicago, editing by Dave Zimmerman)
Sterling was on course for its biggest one-day percentage loss against the dollar since mid-1993 on Monday, due to financial sector stress after UK lender Bradford & Bingley (BB.L) was nationalized.
Deepening banking sector and money market woes against a backdrop of slowing growth also dimmed the pound's yield appeal as speculation grew that the Bank of England would need to cut rates soon.
"Sterling continues to be hit by financial sector stress," ING senior currency strategist Chris Turner said in London.
"But that is not all. The BoE may finally have to acknowledge sharply higher credit conditions and that weak growth will show substantially below-trend demand that will open the possibility for rate cuts."
"So the pound will likely continue to be an underperformer."
At 1100 GMT, sterling was down 2.3 percent at $1.8025 after hitting a 10-day low of $1.7962, according to Reuters data, on track for its biggest one-day fall since June 1993.
In a widely anticipated move, the UK government said lender Bradford & Bingley's branch network will be sold to Spanish bank Santander (
But the news raised concerns of further fallout from a banking crisis that was spreading beyond U.S. borders.
The pound also lost ground against euro, but the single currency was also reeling from banking sector woes.
Belgian-Dutch financial group Fortis (
Separately, the German government and a consortium of banks decided to provide 35 billion euros ($51.21 billion) in credit guarantees to Hypo Real Estate (
European shares fell heavily as the financial storm hit home and as investors pondered the impact of a long-awaited U.S. government plan to shore up its banking sector.
U.S. lawmakers on Sunday finally reached an accord on package which will provide the U.S. government with up to $700 billion to buy toxic assets from banks. They will vote on the bill later on Monday.
Sentiment was pessimistic about whether European authorities would come together for a similar plan to fix the banking system.
"There is a worry whether there is the ability or the willingness within Europe for a U.S.-style response," said Daragh Maher, deputy head of global FX strategy at Calyon.
Data on Monday showed British mortgage approvals fell to a series low of 32,000 in August while net mortgage lending slowed to a standstill.
Earlier, a survey by property consultants Hometrack showed British house prices fell for a 12th month running in September to stand 6.2 percent lower than they were a year ago.
The BoE will hold its next rate-setting meeting on October 8-9. Traders expect the central bank to cut benchmark interest rates from the current 5 percent as early as November.
(Reporting by Tamawa Kadoya)
As the economic downturn gains momentum and credit crunch casualties continue to increase, it's more important than ever for consumers to take out some form of income protection, so they can pay their monthly bills should they lose their jobs, warns Payment Protection Insurance sector lobbyist Sara-Ann Burgess from Burgesses.
Braintree, Essex (
She comments: "Only this week we've seen the collapse of the fourth largest investment bank, Lehman Brothers and witnessed on the news, employees packing up their belongings in boxes, facing an uncertain future. XL Airways employees were equally devastated to find they were out of a job last week and there's a general nervousness about the stability of HBOS.
"Now is not the time to turn your back on income protection, it's vital that during these difficult times, everyone has a financial safety net to help meet monthly commitments should something happen. Even if you have savings to fall back on, how long will these last given the current food, fuel and utility prices? Income protection provides a monthly replacement income for up to a year, paying those all important bills and giving much-needed financial breathing space to those who either need to find a new job or recover from an accident or sickness."
The reputation of the PPI sector has been tarnished over the years - it's currently under close scrutiny from the Competition Commission, following allegations of mis-selling, high pressure sales tactics, over-priced products and vast numbers of claims rejections, due to policies being sold to the wrong people.
Consumers have subsequently turned their back on providers. This, suggests Sara-Ann, is leaving millions of people exposed to financial hardship should they be made redundant, have an accident or become sick.
She continues: "Over-priced PPI products have been marketed by High Street banks and building societies for years and people now take the view they would rather save their money and take a chance. In this current climate, it's a very risky strategy and one I do not recommend.
"However, there are many more-ethical independent
Sara-Ann concludes: "Over the last week we've seen people in despair, wondering how to pay their bills, feed their children and keep a roof over their head when there are no wages coming in. Whilst the redundancy could not have been avoided, the financial hardship that will inevitably follow can."