Walgreens (NYSE:WAG) announced its results for the most recent quarter on September 28, 2012. Walgreen operates a chain of retail drug stores.

In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: 12 Things You Need To Know About Financial Statements

The Numbers: Walgreens fell short of estimates with 39 cents per share and revenues of $17.07 billion. Analysts were expecting 57 cents per share and revenues of $17.41 billion. Revenue fell 5% from the same period last year while EPS is down 55.2%. Revenue declined last quarter after shrinking 3.4% to $17.75 billion in the third quarter. The company's net income for the quarter was $353 million. This is a 55.4% decline from last year. The company has now reported lower net income in each of the last four quarters.

Management Quote: "This was a challenging, but very important year for Walgreens, and we finished with a tough quarter. While we controlled costs and generated strong cash flow in the fourth quarter, our performance also reflected a strategic shift in promotional spending, a continued economically challenged consumer, and the impact from Express Scripts," said Walgreens President and CEO Greg Wasson. "Entering the new fiscal year, we believe we are positioned for growth as we benefit from the launch of our Balance Rewards loyalty program, our reentry into the Express Scripts pharmacy provider network and our execution of the Alliance Boots strategic partnership."

A Look Back: Net income has dropped 2% year-over-year on average across the last five quarters. Performance was hurt by a 55.4% decline in the most recent quarter from the year-earlier quarter.

The company's cost of sales slipped to $12.24 billion, a dip of 71.8% from a year ago. Last quarter, cost of sales was 71.7% of revenue versus 71.8% a year earlier.

Looking Ahead: When earnings estimates stay consistent leading up to earnings season, this usually shows analysts accurately predicted earnings estimates and business is stable. Be cautious though as this may also be a warnings sign that earnings could come at a huge surprise to the upside or downside as analyst did not correctly predict earnings. Steady earnings estimates mean there is not enough change going on with the company to make analysts change their opinions. When earning estimates are steady, investors can look at the revenue trend for a more fundamental indicator. For the fiscal year, the average estimate has moved down from $2.63 a share to $2.61 over the last 90 days.