CAMP HILL, Pennsylvania — Rite Aid Corp. topped analyst expectations for its second quarter, but the drugstore chain's stock tumbled Thursday after it also dropped its fiscal 2015 earnings forecast for the second straight quarter due in part to an expected decrease in pharmacy profitability.
The Camp Hill, Pennsylvania, company said that earnings for the quarter that ended Aug. 30 more than quadrupled to $129.2 million, or 13 cents per share. That compares to $30 million, or 3 cents per share, last year.
Analysts expected, on average, earnings of 6 cents per share, according to Zacks Investment Research.
Revenue climbed about 4 percent to $6.52 billion. That also topped analyst expectations, which were for $6.49 billion.
The company now expects earnings of 22 cents to 33 cents per share on revenue of between $26 billion and $26.3 billion. That compares to a forecast it made in June for earnings of 30 cents to 40 cents per share on $26 billion to $26.5 billion in revenue.
Rite Aid said it lowered its earnings forecast based on expected lower profitability from generic drugs, which are cheaper versions of brand-name drugs. In June, it had lowered its forecast from one it made a couple months earlier for 31 to 42 cents per share.
Analysts expect, on average, earnings of 34 cents per share on $26.3 billion in revenue, according to the data firm FactSet.
Credit Suisse analyst Edward J. Kelly said in a research note the additional guidance drop was disappointing, but results should improve. He rates the stock "outperform" and lowered his price target on it to $7 from $8.50.
Rite Aid is the nation's third-largest drugstore chain with nearly 4,600 stores, trailing Walgreen Co. and CVS Health.
Shares of Rite Aid sank 17 percent, or $1.14, to $5.50 in midday trading, while broader indexes were nearly flat. The shares had already climbed 31 percent since the start of the year, as of Wednesday.
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