Staples tops estimates, raises profit outlook

By Reuters
Wednesday, August 17, 2011 7:33 EDT
google plus icon
  • Print Friendly and PDF
  • Email this page

The news boosted Staples’ shares by 8.3 percent to $15.40 in premarket trading.

Smaller rivals have also shown some improvement on the profit front lately, with Office Depot<ODP.N> reporting a smaller-than-expected quarterly loss andOfficeMax <OMX.N> posting better-than-expected earnings.

Many investors look at office supply retailers as a good gauge of the economy as demand for their products is closely tied to white-collar employment rates. Sales at all three chains have suffered in the weak U.S. economy, and the companies continue to keep a tight rein on costs to offset weak demand.

For the full year, Staples continues to see sales rising at a low-single-digit percentage rate.

Its net income rose to $176.4 million, or 25 cents a share, in the second quarter, from $129.8 million, or 18 cents a share, a year earlier.

Excluding a tax refund, it earned 22 cents a share. On that basis, analysts on average were expecting 19 cents a share, according to Thomson Reuters I/B/E/S.

Sales rose 5.2 percent to $5.82 billion, while analysts expected $5.65 billion.

For the full year, Staples now sees net earnings of $1.42 to $1.48 a share. In May the company cut its forecast to a range of $1.35 to $1.45 a share.

Excluding the tax refund in the second quarter, Staples sees full-year earnings of $1.39 to $1.45 a share.

(Reporting by Dhanya Skariachan; editing by John Wallace)

Reuters.com brings you the latest news from around the world, covering breaking news in business, politics, technology, and more.
By commenting, you agree to our terms of service
and to abide by our commenting policy.