When Walgreen (NYSE:WAG) releases its fourth quarter earnings on Friday, September 28, 2012, analysts are expecting a 1.8% drop in earnings from a year ago. The consensus estimate is 56 cents per share, down from earnings of 57 cents per share a year ago.

Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: 5 Tricks Companies Use During Earnings Season

What to Expect: The consensus estimate is down from 58 cents three months ago, but it hasn't changed in the last month. Analysts are projecting earnings of $2.59 per share for the fiscal year.

Revenue for the quarter is expected to be $17.16 billion, short of last year's reported figure of $17.97 billion by 4.5%. Walgreen is expected to report revenue of $71.69 billion for the fiscal year.

Company Performance: Walgreen reported a decline in revenue in the third quarter, ending a three-quarter growth streak. It fell 3.4% in the third quarter after rising 0.8%in the second quarter, 4.7% in the first quarter and 6.5% in the fourth quarter of the last fiscal year.

WAG has a P/E ratio of 12.3, high compared to the industry average of 1.81. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock

Over the past quarter, the stock price has risen to $35.67 from $29.42 on June 27, 2012. The biggest recent change for Walgreen's stock price came on July 19, 2012, when it rose $3.65 per share to $34.62.

The Competition: Walgreen operates a chain of retail drug stores. Most analysts (10 of 19) give Walgreen a hold rating. They have become increasingly pessimistic about the stock, as the number of buy ratings has dropped slightly over the last three months.

The company's closest competitor in the retail (drugs) industry is CVS (CVS). Analysts are less optimistic about Walgreen than about CVS. Seventeen out of 19 analysts rate the latter a buy compared to eight of 19 for the former.



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Tickers in this Article: WAG

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