Walgreen offers $2 billion buyback on 2009 cash flow

Walgreen Co., the second-largest U.S. drugstore chain, authorized a $2 billion share buyback after posting record cash flow.

The new repurchase program expires in 2013 and replaces a $1 billion plan from 2007, the Deerfield-based retailer said today in a statement. The company also boosted its quarterly dividend 22 percent from a year earlier to 13.75 cents a share, matching a July increase.

The chain, which opened its 7,000th store this month, had cash flow from operations of $4.1 billion for the year ended in August as it increased pharmaceutical sales and refocused its product line to emphasize essentials like milk, soap and bread.

Walgreen rose $1.08, or 2.8 percent, to $39.83 at 4:01 p.m. in New York Stock Exchange composite trading. The shares have jumped 61 percent this year.