Drugstore operator Walgreens Boots profit beats estimates

Walgreens Boots Alliance Inc reported a better-than-expected quarterly profit, helped by cost cutting and synergies from taking full control of European pharmacy chain Alliance Boots.

Walgreens, which is in the process of buying smaller rival Rite Aid Corp, said in April last year that it had identified ways to cut costs by $1.5 billion by the end of its fiscal year in August 2017.

Walgreens said on Tuesday that it achieved net synergies of $329 million in the second quarter ended Feb. 29 from its acquisition of the 55 percent it did not already own in Alliance Boots, Europe's biggest pharmacy chain, in December 2014.

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The company also said that it expected the Rite Aid deal to close in the second half of 2016 as scheduled.

Sales at Walgreens' U.S. pharmacy stores open at least a year fell 0.3 percent in the quarter due to soft cough, cold and flu product sales.

Net income attributable to Walgreens fell to $930 million, or 85 cents per share, in the quarter, from $2.04 billion, or $1.93 per share, a year earlier.

The year-ago quarter included a non-cash gain of $814 million.

Excluding items, the company earned $1.31 per share, beating the average analyst estimate of $1.28, according to Thomson Reuters I/B/E/S.

Net sales for the largest U.S. drugstore operator by store count rose 13.6 percent to $30.18 billion, but missed the average analyst estimate of $30.66 billion.