Rite Aid 4Q Profits Misses Expectations

By MARC LEVY

HARRISBURG, Pa. – Rite Aid Corp. on Thursday reported a small fourth-quarter profit that missed expectations, and the nation’s third-largest drugstore chain said it now expects to close its purchase of 1,850 Brooks and Eckerd stores by the end of May.

The Camp Hill-base chain also said it now expects to save more money in efficiencies from the $3 billion purchase of the U.S. Eckerd and Brooks operations than it originally announced.

For the three months ending March 3, Rite Aid said it earned $7.1 million, or a penny per share.

Analysts surveyed by Thomson Financial predicted a profit of 2 cents a share.

In the same period a year ago, the company reported a gain of $1.25 billion attributable to common shareholders, or $1.83 cents per share, although all of it except for $5.3 million was attributed to one-time items, mainly a tax benefit.

Revenue for the quarter dropped 4.4 percent to $4.56 billion, down from $4.77 billion a year ago, which the company said was due to a shorter fourth quarter this year than last.

Rite Aid announced in August that it would acquire the U.S. Eckerd and Brooks operations of Canada’s Jean Coutu Group Inc. for $1.45 billion in cash and 250 million shares now valued at about $1.55 billion, plus the assumption of $850 million in debt. The Federal Trade Commission is reviewing the deal.

It said Thursday that it expects the deal will result in savings of $225 million a year, after originally saying it anticipated savings of $150 million a year.

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On the Net:

Rite Aid: http://www.riteaid.com