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Walgreen Profits Up 17 Percent in Second Quarter

CHICAGO - Walgreen Co., the nation's largest drugstore chain, today posted a 17 percent profit gain in its fiscal second quarter, due largely to the continuing increase of prescription drug sales.

Deerfield, Ill.-based Walgreen said its earnings for the three months ended Feb. 29 were $433.5 million, or 42 cents per share, compared with $370.9 million, or 36 cents per share, a year earlier. Not counting a gain of $12.7 million from a litigation settlement, earnings were 41 cents per share.

Revenues were $9.78 billion, up 16 percent from $8.45 billion a year earlier, thanks largely to a 19 percent rise in prescription sales. Prescriptions accounted for 60 percent of sales in the quarter.

The company cited the prescription growth as justifying its heavy spending on new drugstores and 24-hour stores. Walgreens has added 338 stores in the past year, for a total of 4,336 in 44 states and Puerto Rico as of Feb. 29.

"Even with these (sales) gains, our pharmacies are poised for more growth as the population ages and the Medicare prescription drug benefit begins," chairman Dave Bernauer said.

For the first six months of its fiscal year, net earnings were $688.4 million, or 67 cents a share, up from $602.5 million, or 58 cents a share, in the same period of fiscal 2003. Revenues increased 16 percent to $18.5 billion from $15.9 billion.
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