Walgreen (WAG) soars on earnings report

It is worth noting that year over year earnings were down, as the company earned 45 cents per share during the same period last year, but investors have chosen to overlook this and focus on how well the company was able to beat out analyst estimates for the quarter.

The stronger than expected earnings came as the company witnessed a nice jump in prescription drug sales during the quarter. The company filled 9 percent more prescriptions compared to the same period last year.

The recession has forced Walgreen, like so many other companies, to focus on what really matters... cutting costs. The company reduced the number of new stores it was planning to open, and streamlined its items for sale. The company opened 149 new drugstores during the period, down from 162 in the third quarter, and 199 during the same period last year.

Prescription sales were definitely the main contributor to the company's success in the quarter. Same store pharmacy sales were up by 4.5 percent year over year, while non pharmacy sales sank by 1.2 percent over the same period.

Gross margin rose to 27.7% from 27.6%.

For the full year, Walgreen earned $2 billion, or $2.02 per share, down from $2.17 during 2008. Revenues were higher in the year, with $63.34 billion, compared to $59.03 billion.

So far, 2009 has been a good year for the stock, especially considering how tough the economic landscape has been. For a better idea of just how strong the stock has performed in 2009, take a look at the following year to date chart: