CVS

(CVS) - Get Report

, which fills the most prescriptions and operates the most drugstores in the U.S., met Wall Street's earnings expectations on the strength of strong growth in pharmacy sales.

For the first quarter ended April 1, net earnings rose to $191.3 million, or 47 cents a diluted share, from $164.6 million, or 40 cents a share, a year earlier, matching the consensus estimate of analysts polled by

First Call/Thomson Financial

.

Revenue rose to $4.7 billion from $4.2 billion a year ago, bolstered by pharmacy same-store sales that rose 15.2%.

Gross margins declined about 20 basis points because of the company's continued shift toward the lower-margin pharmacy and third-party businesses.

During the quarter, CVS, based in Woonsocket, R.I., opened 29 new stores and relocated eight others. It now operates 4,078 stores.

Shares of CVS dropped 1, or 2%, to 43 3/4 in Tuesday morning trading. (CVS closed down 5/8, or 1%, at 44 1/8.)