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Vaccines fuel Walgreens earnings beat, UnitedHealth Group raises guidance, Domino’s Pizza stock falls flat on mixed Q3 earnings

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Yahoo Finance's Brian Sozzi and Julie Hyman break down how UnitedHealth Group and Domino’s Pizza are faring in Thursday’s market.

Video Transcript

JULIE HYMAN: Our around-the-bell coverage is brought to you by PIMCO, and we're going to dive right into it in terms of some of the other numbers that we got out here this morning because it wasn't just the banks. We had some others to mention as well.

Walgreens one of them. Walgreens Boots Alliance reported fourth-quarter earnings that beat estimates, a profit of $1.17 a share. Sales $34.3 billion. Both of those figures did come out and beat estimates

Walgreens itself provided 13.5 million COVID vaccinations in the quarter, so that's something that helped out its numbers. Comp sales at Walgreens stores up 8.1%.

Brian Sozzi, I know you've been going through the numbers here. What stands out to you about Walgreens?

BRIAN SOZZI: Yeah, it's about time Walgreens gets a look by the market here, and the stock is generally performed in line with the S&P 500 year to date. But you look at this quarter, Julie. Strong in prescriptions. Strong in their retail business. You mentioned an 8.1% comp increase. That is really good and likely above what CVS will report very soon. Favorable profit margins in the retail business. That also called out.

But I think the big-- one big takeaway here, they are highlighting $2 billion in cost savings. They have met that mark one year ahead of schedule. And you go through the release, Julie, and you can see areas or just sense areas that they have cut expenses to boost their profit margins.

And you have to give a hat tip to Roz Brewer. I mean, she's the CEO of Walgreens. She's coming up on her one-year anniversary as CEO, former CEO of Sam's Club. A friend of our network. She's been on many times when she worked at Starbucks. So good to see her finally starting to turn Walgreens around.

JULIE HYMAN: It's interesting because the shares, I noticed, after the numbers initially came out were up more than 2%. And now as we see the cash open here this morning, they're up only about a 1/3 of 1%. So we'll have to see. I know the call was at 8:30, so I don't know if there was something on the call that maybe took a little bit of wind out of the sales there, but we'll keep looking into those numbers and that commentary.

I want to mention UnitedHealth Group as well. The big health insurer came out with earnings of $4.52 a share. That's ahead of estimates. It looks like revenue was also ahead of estimates. And the company is giving its forecast for the full year as well. It looks like it is raising the range for that forecast.

Something else you've got to talk about when you talk about health insurers, the so-called medical loss ratio. How much of the premiums are they paying out to pay for various medical procedures and care? And that was at 83%.

Optum, the company's health-care service-- health-services business, excuse me, was up by 13.9%.

UnitedHealth, in addition to being, I believe, the biggest insurer, is also one of the first to report. And look at that gain that we're seeing in the shares, about 6%. This is fairly unusual to see a gain like this in UnitedHealth Group. Usually, you know, you see a little bit more muted reaction when you get numbers from this health-care giant, Brian.

BRIAN SOZZI: Yeah, and I'll quickly add Julie, too, UnitedHealth usually sets the tone for insurance-company earnings. They're always the first one to report. Not surprised off of this quarter, you're seeing shares of Cigna up about 3 and 1/2% in sympathy to these UNH results.

But you took a-- you look at the Walgreens quarter. Strong in terms of prescriptions. UnitedHealth-- you know, you get the sense that, yes, Cigna might have-- probably had a pretty good quarter too when they report.

JULIE HYMAN: Yeah, we'll be looking ahead to those numbers also.

And then got to talk pizza. I just realized we have pizza and beer on the show today because we're talking Domino's Pizza right now. We're going to talk to the head of Constellation Brands in just a few moments.

Domino's Pizza out with numbers that missed estimates in terms of the revenue line. Earnings per share still beat, though, as you can see there. Total domestic stores comp sales down 1.9%. So interesting here that we are seeing a little bit of loss of momentum, I guess you could say, Brian.

BRIAN SOZZI: Yeah, this quarter for, like, Domino's really was as stale as a 10-day-old pizza left out on the kitchen counter. I mean, it was just not a good quarter.

And you really have to look, right, one, at the revenue miss. The market is not liking that from the usually red-hot Domino's Pizza.

US same-store sales down 1.9%. Sales at company-operated restaurants and franchises both down. My takeaway for this quarter, it's a Papa John's environment out there. Papa John's has been very aggressive in terms of marketing. We've talked to CEO Rob Lynch a ton. He is turning that company around, maybe at the expense of a lot of the momentum Domino's had been seeing over the past two years.

JULIE HYMAN: I just saw a headline about Walgreens. If we can bring Walgreens shares back up here for just a second, guys, if that's possible. It looks like the company is making a big investment in a company called VillageMD, $5.2 billion. So you can see why that caught my eye here.

And VillageMD is apparently going to have an IPO in 2022. So that perhaps is something that's affecting the shares here this morning as, again, we see them higher but not as high as they were earlier in the session. Thanks for playing along and bringing that stock back up, y'all.

Let's, as we head to break, just quickly want to check on some of the big banks that we talked about at the top of the show to see how they are trading now that regular trading has indeed opened up. And we've got a mixed picture here. We've got a split decision.

Citigroup and Wells Fargo are trading a little bit lower here this morning. Wells Fargo just has been struggling, hasn't it? The company's net income was really boosted by its reserve release, so that could be why the shares are not performing better.

Then you have Morgan Stanley and Bank of America which are on the rise. Bank of America a standout here. As we've been talking about, one of the common themes is that loan growth has not been recovering, but investment-banking fees are working pretty robustly. And by the way, that was the case even at Wells Fargo, which is not traditionally known as a big investment-banking operation.