Walgreens Uses Windfall From GOP Tax Cut To Buy Back Shares
Last edited Thu Jun 28, 2018, 01:15 PM - Edit history (1)
Source: Think Progress
Like so many other massive corporations, the company is using its extra cash to enrich itself, not its workers.
Walgreens this week said it plans to buy back as much as $10 billion in shares and raised dividends 10 percent in the wake of the GOP tax cut passed in December. The company is the latest to spend its tax windfall on shares, rather than workers, as many corporations pledged when the tax bill was being debated.
Walgreens on Thursday reported its effective tax rate was 7.6 percent, compared to 12.4 percent in the same quarter last year; profits also rose and sales were up 14 percent to $34.3 billion.
I am pleased that, in what has been a challenging environment, we have again delivered solid earnings per share growth combined with healthy cash flow, Executive Vice Chairman and CEO Stefano Pessina said in a statement. We expect to continue to drive growth, bringing more patients to our U.S. pharmacies through the recent acquisition of Rite Aid stores and through strategic partnerships.
In a separate statement, Executive Vice President and Global CFO James Kehoe added, Our new $10 billion share repurchase program demonstrates our commitment to return cash to stockholders in the form of dividends and share repurchases over the long term. The company previously announced it would boost hourly worker wages by $100 million a year...
Read more: https://thinkprogress.org/walgreens-uses-windfall-from-gop-tax-cut-to-buy-back-shares-c0c91474ca52/
rogue emissary
(3,148 posts)We're going to see more companies doing the exact same thing.
Phoenix61
(17,019 posts)Wash, rinse, repeat....
C Moon
(12,221 posts)appalachiablue
(41,174 posts)bucolic_frolic
(43,296 posts)W told us. "The ownership society"!!!
They own us. You can't say you weren't warned!
SWBTATTReg
(22,166 posts)its shareholders. So much for the greatest tax cut ever (per rump, a joke of course, tax cut of 2018 is not the greatest tax cut ever). So, lets say 40 workers per Walgreens times maybe 8000 stores = 320,000 workers (I'm underestimating too, there are more than 8000 Walgreens), doesn't even get to 20 cents an hour.
I'm approximately this, again, point showing how pathetic this is (the hourly increase)...
turbinetree
(24,720 posts)eliminate the minimum wage................
appalachiablue
(41,174 posts)"A number of companies have reported similar buyback programs in the months since the GOP tax bill was passed. The bill cut the corporate tax rate from 35 percent to 21 percent and repealed the corporate alternative minimum tax, which ensured companies paid at least some taxes. Corporations are also no longer required to pay taxes on overseas profits and will pay a meager 8 to 15 percent repatriation tax for any money they bring back into the country.
Initially, companies like Walmart, AT&T, Hostess, Wells Fargo, Comcast, and dozens of others pledged to use the tax cut for their employees, promising bonuses and, in some cases, small wage increases. The Trump administration repeatedly touted the bonuses in subsequent press briefings, bragging that they were proof the GOP tax bill which it claimed would benefit middle class families and workers was a success.
Since then, however, massive corporations have spent hundreds of billions of dollars on share buybacks. According to Howard Silverblatt, senior index analyst S&P Dow Jones Indices, corporations are likely to spend at least $1 trillion on buybacks and dividend increases by years end. As Money Magazine notes, share buybacks are intended to artificially increase acompanys earning per share and do little to improve the economy.
<New data shows wages have gone down for people who aren't bosses or business leaders, following the GOP tax cuts.>
*Workers wages fall after passage of GOP tax cuts: Worker wages, by contrast, have declined since the tax bills passage, according to the Bureau of Labor Statistics. On June 12, the BLS issued its real earnings summary covering the time period between May 2017 through May 2018. The report showed that, for production and nonsupervisory employees, real average hourly earnings decreased 0.1 percent, seasonally adjusted.
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irisblue
(33,034 posts)Power 2 the People
(2,437 posts)What's it going to take to break the spell Republicans have on idiots who vote for their own demise?
appalachiablue
(41,174 posts)riversedge
(70,306 posts)riversedge
(70,306 posts)fixed the OP headline
BumRushDaShow
(129,513 posts)By Sarah Ponczek
June 28, 2018, 11:43 AM EDT
As if refusing to split its stock werent enough, Amazon.com Inc. keeps creating headaches for the Dow Jones Industrial Average, spoiling this weeks debut of Walgreens Boots Alliance Inc.
An announcement by Jeff Bezos virtual superstore that its buying online pharmacy startup PillPack sent tremors through the drugstore space. Walgreens, added to the 122-year-old index Tuesday morning, was one of the biggest casualties.
We would call that the Amazon effect, Ernie Cecilia, chief investment officer at Bryn Mawr Trust Co., said by phone. With Amazons acquisition of PillPack, will it have a continuing negative effect on Walgreens which is now a new member of the Dow? Sure, it definitely could.
Walgreens tumbled 9.2 percent as of 11:38 a.m. in New York, slashing more than 40 points from the Dow itself, the most of any company in the index. The drug-store chain also reported earnings Thursday that beat analyst estimates and announced a $10 billion share buyback program, but it wasnt enough to fend of Amazons impending foray into the health care business.
https://www.bloomberg.com/news/articles/2018-06-28/amazon-makes-more-trouble-for-the-dow-by-ruining-walgreens-debut
So although the business media considers that a "ruin of debut", this 9% "drop" in Walgreens stock meant that Walgreen's could to their buy back at a cheaper price.
Surprise surprise.
muntrv
(14,505 posts)Bengus81
(6,932 posts)Thanks FDR.........
Bengus81
(6,932 posts)Workers?? To hell with you,don't like it then apply at Mikey D's. Gosh...this is going DOWN just like it was predicted. I am shocked!! Pffftttt.
BTW...Don't EVER listen to that horse shit that NEO CONS spew on how Corporations paid a 35% Federal rate.
47of74
(18,470 posts)There's a local chain here and I think I'd feel better using them if the insurance allows for it.
OnlinePoker
(5,726 posts)Americas 500 biggest public companies in 2018 are expected to distribute up to $600 billion or more through stock buybacks.
Even Warren Buffett, who for more than 50 years has avoided such a move, is considering offering a buyback to his 1 million shareholders in Berkshire Hathaway.
As the subject of repurchases has come to a boil, some people have come close to calling them un-American characterizing them as corporate misdeeds that divert funds needed for productive endeavors, Buffett wrote in his annual letter to shareholders. That simply isnt the case.
Some of Americas best-known companies are right there with him Cisco Systems, PepsiCo, Oracle, Wells Fargo, Amgen, eBay, Mondelez, Lowes, Visa and Googles parent Alphabet have all announced stock repurchases since December.
https://www.thestar.com/business/2018/04/16/why-some-of-the-biggest-companies-in-the-us-are-announcing-buybacks.html
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By way of comparison, in Obama's last year in office, total stock buybacks were around $160 Billion
Ron Obvious
(6,261 posts)Short-term stock value is the only metric CEO's are judged on these days.
Cold War Spook
(1,279 posts)Corporations do owe all they can to their shareholders.
smirkymonkey
(63,221 posts)Have a nice stay.
LastLiberal in PalmSprings
(12,595 posts)If they had their way, corporations wouldn't pay their employees a single dime, and then tell them, "you should be grateful that you have a job."
Bengus81
(6,932 posts)Throw all the cash you want in a business,it's a POS that will FAIL if not for the people making it run on a daily basis while rich shareholders lay around the beach sipping umbrella drinks.
handmade34
(22,758 posts)the first thing I learned in my business classes was that business owes both stockholders and stakeholders... morally and for good business
Stakeholders are not only stockholders, but suppliers, customers, employees, and the local community
IronLionZion
(45,534 posts)after the repurchase props up prices. That's a warning sign for our economy if they want to take their gains now and sell out.
Obamacare has been good for drugstores because more insured people means more customers.
Sunlei
(22,651 posts)Walgreens sw Houston is ALWAYS out of whole milk and most grocery items are their 'nice brand', that nice bread is horrible processed.
everything has 'we take snap' signs on it- those processed breads, full of salt nice soups, nice sugar drinks, nice cereals, nice meals, aren't very healthy are they? ya think a 'drug store' would care about healthy foods