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Walgreen Earnings Rise 14 Percent

September 30, 2002

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DEERFIELD, Ill. (AP) _ Surging prescription drugs sales help boost Walgreen Co. earnings by 14 percent in the fourth quarter, but the results narrowly missed earnings expectations and Walgreen shares tumbled in early trading Monday.

For the quarter ending Aug. 31, Walgreen on Monday reported that net earnings rose to $247.7 million, or 24 cents per share, from $216.9 million, or 21 cents per share, during the same period last year.

Sales for the period rose 15.1 percent to $7.2 billion from $6.3 billion last year.

The consensus forecast by analysts surveyed by Thomson First Call was for earnings of 25 cents a share.

In early trading on the New York Stock Exchange, Walgreen shares were down 10 percent, or $3.38 a share, at $30.51.

Prescription drug sales rose 19.9 percent in the fourth quarter, and accounted for 60 percent of sales in fiscal 2002, up 21.2 percent for the year.

Total sales in stores open more than a year were up 9.4 percent for the quarter and 10.5 percent for the year. The company reports it opened 471 new stores this year.

For the year, earnings rose to $1.019 billion, or 99 cents a share, from $885.6 million, or 86 cents per share, a year earlier. Sales rose 16.5 percent to $28.7 billion for the year from $24.6 billion.

``We ended 2002 in the strongest financial position in our 101-year history,″ chairman Dan Jorndt said. ``We’re generating strong cash flow, we have virtually no debt and we have more than $400 million in the bank and nearly $3 billion in owned real estate.″

``We’re seeing continued market share improvements, and our aggressive store opening program is ahead of schedule,″ Jorndt said.

Walgreen’s expansion emphasizes the southern half of the country, particularly Florida, Texas, California, Nevada and Georgia. Those states are where the population is both growing and aging more rapidly than other states.

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