Reuters: Hot Stocks: UPDATE 2-Generic drug sales help Rite Aid to surprise profit

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UPDATE 2-Generic drug sales help Rite Aid to surprise profit Sep 19th 2013, 18:52 Thu Sep 19, 2013 8:00am EDT * Second-quarter earnings $0.03/share vs est loss $0.04/share * Raises FY 2014 earnings forecast to $0.18-$0.27/share vs est $0.14 * Shares up 17 pct premarket (Adds outlook, analyst estimates, background; updates share movement) Sept 19 (Reuters) - Rite Aid Corp, the third-largest U.S. drugstore chain, raised its profit forecast for the current year after reporting a fourth straight quarterly profit, boosted by sales of higher-margin generic drugs. Rite Aid shares jumped 17 percent in premarket trading. The company raised its earnings forecast for the year ending February to 18-27 cents per share from 4-19 cents. The company also raised the lower end of its revenue forecast, taking the range to $25.1 billion-$25.3 billion from $24.9 billion-$25.3 billion. Analysts on average were expecting a profit of 14 cents per share on revenue of $25.31 billion, according to Thomson Reuters I/B/E/S. Rite Aid, however, said it expected a significantly lower benefit from new generic drugs in the second half of the year. The company, along with rivals Walgreen Co and CVS Caremark Corp, has benefited from higher profit margins on generic drugs although the lower prices of these drugs have eroded revenue. Rite Aid warned of reasonably flat same-store sales this year. The company reported a net income of $32.8 million, or 3 cents per share, in the second quarter compared with a net loss of $38.8 million, or 5 cents per share, a year earlier. Revenue rose 0.8 percent to $6.28 billion in the quarter ended Aug. 31. Same-store sales increased 1 percent. Analysts on average were expecting a loss of 4 cents per share on revenue of $6.27 billion. Rite Aid stock was trading at $4.35 before the bell. The shares have almost tripled this year. (Reporting by Maria Ajit Thomas in Bangalore and Jessica Wohl in Chicago; Editing by Joyjeet Das and Kirti Pandey) Link this Share this Digg this Email Reprints

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