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Walgreen Posts Flat Earnings

The drugstore chain misses analysts' estimates.
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fourth-quarter earnings rose 1.4% from a year ago, missing estimates as the company pursued an aggressive expansion campaign.

The drugstore operator earned $329.0 million, or 32 cents a share, in the quarter, compared with $324.4 million, or 32 cents a share, a year ago. Excluding items related to Hurricane Katrina and litigation, Walgreen's earnings rose 12.1% to $363.3 million, or 35 cents a share.

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On that basis, analysts were forecasting earnings of 37 cents a share, according to Thomson First Call.

Fourth-quarter sales rose 11.3% from a year ago to $10.49 billion; analysts were expecting $10.58 billion, according to Thomson First Call. Same-store sales rose 7% from a year ago, while prescription sales rose 11.5% in the fourth quarter. Comparable-store prescription sales rose 7.7% from a year ago.

The company opened a net 371 stores in the fiscal year ended Aug. 31.

"We're in excellent shape to continue our expansion plans while investing in new store technology and customer service initiatives," the company said. "The Medicare prescription insurance plan that takes effect Jan. 1 marks another important opportunity to grow our pharmacy business. The program will allow seniors to choose their pharmacy based on services and convenience -- areas in which we excel."