Walgreen (WAG) is having a merry Christmas. The stock closed on Thursday at $39.19. The 52-week high for the shares is $40.20. Pretty cool for those who own this name. Something even cooler: the drugstore chain issued a solid fiscal first-quarter report earlier in the week.

The press release begins with three bragging bullet points: the top line gained 6% and came in at $17.3 billion; gross margin expanded by 80 basis points; operating cash flow was $1.2 billion. Nice, but in terms of the latter point, it should be noted that cash from operations was essentially flat compared to last year's number. That's okay, though, it's still respectable.

I never would have predicted such a bullish reaction. As I write this, Walgreen (WAG) is up over 12% to $34.04 on the back of an earnings report. With one hour to go before the market closes, volume is huge.

Those of you who bought prior to the report could not have possibly expected this. It represents a big departure from the last time the drugstore posted results. Back in June, shareholders were disappointed with their investment since Wall Street thought the stock should be sold off on the data. It's like night and day this afternoon.

Rite Aid's (RAD) sell-off Thursday was almost comical. Sometimes you've just got to laugh when a stock that's trading around a dollar suddenly drops over 13%. That's exactly what the drugstore's shares did by the end of the day's regular session. It finished at a quote of 95 cents. And, as you might expect, volume was pretty significant.

Who buys a stock like this? Clearly, someone braver than me. Adding this one to a portfolio is basically no different than playing the slots in Vegas. The one-year chart hasn't changed much since I discussed the company back in June; it still tells a tale of volatility and downward momentum. It's not a ride I'm willing to take.

CVS Caremark (CVS), a drugstore chain that competes with Rite-Aid Corporation (RAD), Walgreen Company (WAG), and Wal-Mart Stores, Inc. (WMT), is acting in a boring way this afternoon. My screen shows, at the time of this writing, the stock down 44 cents, or 1.2%, to $36.64.

That's not too bad for the kind of trading session we're having. I bet CVS would have been up today following its Q1 report had the market action been different. But the tape is the tape, you can do nothing about that. According to Bloomberg BusinessWeek, the company made, on an adjusted basis, 60 cents per share, which was two pennies ahead of estimates.

Rite Aid (RAD) continues to be a stock that I want to avoid. I know it's risen a lot over the last year, but such price action doesn't sway me in this case.

You've got to be careful when a company reports a loss, even if that loss is narrower than what was reported in the comparable period. In the fiscal fourth quarter, Rite Aid lost 24 cents per share. Last year at this time, the red ink came out to $2.67 per share. Yes, this is a vast improvement; same thing happened in the third quarter back in December of last year.

Walgreen Company (WAG), a drugstore entity whose major competitors are CVS Caremark (CVS), Rite Aid (RAD), and Wal-Mart Stores, Inc. (WMT), reported second-quarter data earlier today; they weren't too thrilling, to be completely honest.

On a reported basis, net income increased three pennies to 68 cents per share. On an adjusted basis, earnings came out to 70 cents per share (this would be after adding back the two pennies dedicated to restructuring charges). Estimates called for 71 cents per share. Poor Walgreen just couldn't keep up with the analysts this time around.

CVS Caremark (CVS), which competes with Walgreen (WAG), Rite Aid (RAD), and Wal-Mart (WMT), posted fourth-quarter data on Monday. Sales increased 7%, and adjusted earnings per share from continuing operations (excluding, in addition, a penny per share relating to a tax benefit) came in at 78 cents -- good for a growth rate of over 11%. That bottom-line performance matched analyst projections, according to our earnings preview.

As we all know, matching expectations is sometimes the death of a stock. The market has no conscience when it comes to mercilessly punishing an equity for not going beyond the call of the analysts. However, CVS actually did pretty well yesterday, rising 5% by the end of the session; the move was backed by healthy volume.

According to this summary at Reuters, top-line sales decreased a little under 2%, and the loss per share came in at 10 cents. This was a lot better than the 30 cents per share lost in the comparable quarter. Expectations were for the red ink to be closer to 18 cents per share.

Rite Aid (NYSE: RAD), which competes with Walgreen (NYSE: WAG), CVS Caremark (NYSE: CVS), and Wal-Mart (NYSE: WMT), saw a big increase in volume on Wednesday after it reported earnings for the first quarter. In fact, as Douglas McIntyre observed, shares of Rite Aid were up 5% at one point during yesterday's session. However, the shares ended up losing their green status by the close of trading. Rite Aid actually lost 3% when all was said and done. What does it all mean?

Well, Rite Aid did beat analyst forecasts by a wide margin. The call was for a loss of 13 cents per share. Rite Aid lost only 6 cents per share once adjustments are made. Revenues dipped a little over 1%, and same-store sales, after excluding the effect of the Brooks Eckerd acquisition, increased 1.5%. Interestingly, the mix of this increase is as follows: the pharmacy sales went up 3.1% on a comparable basis, and the non-pharmacy sales went down 1.4% on the same basis.

Walgreen (NYSE: WAG), a drugstore business that competes with CVS Caremark (NYSE: CVS) and Rite-Aid (NYSE: RAD), will be issuing results for the third quarter on Monday, June 22. According to Earnings.com, the analyst community is prescribing $0.56 per share for the company.

Of course, the question is: will Walgreen honor that prescription and fill it? I'd say it's quite possible. Last time around, Walgreen beat estimates. The call was for $0.66 per share in Q2. If you look at the press release from that time, you'll see that, once you adjust for some items, Walgreen went beyond expectations.

Rite Aid (NYSE: RAD), whose competitors include Walgreen (NYSE: WAG), CVS Caremark (NYSE: CVS), and Wal-Mart (NYSE: WMT), reported Q4 numbers today, and when you read through the release, you sort of come away with a decent feeling. You hear about improvements in this metric and that metric. You wonder if a turnaround might be in the offing. Then you look at the stock price and, even though it is currently being bid higher (it's up over 14% as I write), you come back down to earth and reality hits you in the face. Anything trading under a buck has to give you pause. Rite Aid is no different.

For the quarter, Rite Aid posted a 1.7% decrease in the top line. On an adjusted basis, the drugstore chain reported a loss of $0.14 per share. According to this source, Wall Street thought Rite Aid might lose $0.105 per share. The company is still adjusting to the Brooks Eckerd acquisition. Excluding that effect, same-store sales increased 0.8%. Including the asset, comps decreased 0.1%.

Walgreen (NYSE: WAG), a major drugstore chain whose enemies include CVS Caremark (NYSE: CVS) and Rite-Aid (NYSE: RAD), is getting ready to report earnings for its first fiscal quarter on Monday, December 22. It's Christmas week. Will Walgreen bestow a gift of an earnings beat upon the market?

One thing's for sure: the market does not expect much from the drugstore. Wall Street expects flat performance in Q1. The bottom line should come in somewhere around $0.46 per share, the exact same amount that was booked last year. You know, you figure the company should be able to at least match expectations when the bar is set so low. But it might be tough. We all need access to prescriptions and over-the-counter medications every now and then, and on top of that, many people obviously require long-term drug regimens. So, we can see that the pharmacy part of the equation is somewhat resistant to recession. However, there isn't a pressing need for all the non-pharmacy items in a Walgreen location. You don't need to buy any of those cheap plastic toys, any of those blenders that don't work too well, any of the overpriced groceries, etc. This is where Walgreen has exposure to the weakening consumer. Indeed, the consumer is becoming more and more of a value Grinch as time goes on. People just don't want to pay any more than they have to.