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Walgreen Co. (NYSE: WAG) reported third-quarter fiscal 2014 results before markets opened Tuesday. The drugstore chain reported adjusted diluted earnings per share (EPS) of $0.91 on revenues of $19.4 billion. In the same period a year ago, Walgreen reported EPS of $0.85 on revenue of $18.31 billion. Third-quarter results also compare to the consensus estimates for EPS of $0.94 and $19.48 billion in revenue.

Front-end (i.e., non-prescription) same-store sales rose 2.2% in the third quarter and total sales rose 5.9%. Traffic was down 0.7% though basket size rose by 2.9%.

Prescription sales accounted for 64.4% of sales in the third quarter and were up 8.4% year-over-year. Same-store prescription sales were up 6.3%. At the end of May Walgreen claimed 19% of the U.S. market for retail prescriptions, identical with its share at the end of the company’s second quarter.

Walgreen did not offer any specific guidance updates in its earnings release, but did say that it was withdrawing its fiscal 2016 goals until it decides how the company will affect the completion of its merger with Switzerland-based Alliance Boots. The company said it expects to hold a conference call in late July or early August. The company’s CEO said:

(Executive Chairman of Alliance Boots GmbH) Stefano Pessina and I are working hard to realize our joint vision for exercising step two of the Walgreens-Alliance Boots strategic transaction for consideration by the Walgreens board of directors. We are working through complex issues in planning for step two, and we are taking the appropriate time to come to the right resolution for the combined enterprise.

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Although Walgreen CEO Greg Wasson did not say so, a major point of contention remains whether Walgreen will re-domicile in Switzerland, a move that would cut its corporate tax rate by nearly two-thirds. Several large shareholders have been arguing for the move and Walgreen has been reluctant to make it fearing customer blowback and lost sales if it moves offshore.

Unlike many U.S. firms that have moved offshore to avoid U.S. corporate taxes, a significant percentage of Walgreen’s business comes indirectly from the U.S. government programs like Medicare and Medicaid. Customers have already shown Walgreen that they will leave the company behind — a dispute with pharmacy benefits manager Express Scripts Holding Co. (NASDAQ: ESRX) cost Walgreen millions of dollars when customers filled their prescriptions elsewhere. Walgreen does not want that again, nor does it want Congress to retaliate for an offshore move by an iconic American company.

Shares were down about 2.4% in premarket trading Tuesday, at $71.99 in a 52-week range of $43.31 to $76.39. Thomson Reuters had a consensus analyst price target of around $75.00 before the results were announced.

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