Shares Climb as Rite Aid Cuts Its Losses

Rite Aid Corp. posted a narrower quarterly loss on stronger sales, and its shares jumped as investors welcomed signs that the No. 3 U.S. drugstore chain may be making a comeback after an accounting scandal. Rite Aid said its loss from continuing operations, including special charges, narrowed to $241.2 million, or 74 cents a share, compared with a loss of $249.8 million, or $1 a share, in the year-ago period. Excluding a charge of $135.5 million, or 40 cents a share, for a loss on its sale of PCS Health Systems, the company had a net loss of $105.7 million, or 34 cents a share. Analysts’ estimates ranged from a loss of 41 cents to 54 cents on that basis, according to three estimates compiled by First Call/Thomson Financial. Rite Aid’s revenue was up 7.7% to $3.53 billion, led by an 11% rise in prescription sales. Sales at stores open at least a year rose 10%. Last year, the company restated its financial results $1 billion lower for 1998 and 1999 and reported a $1-billion loss for the fiscal year ended February 2000 after allegations of accounting fraud led to an investigation and the hiring of a new management team. Rite Aid shares rose 44 cents, or 14.7%, to close at $3.44 on the NYSE.