(By Salman) Staples Inc. (NASDAQ: SPLS), the world's largest office products company, is scheduled to release its fourth quarter 2009 earnings before the market open on Tuesday, March 2, 2010. Analysts, on average, expect the company to report earnings of 38 cents per share on revenue of $6.29 billion. For the fourth quarter of the previous fiscal, the company reported earnings of 36 cents per share on revenue of $6.17 billion.
Staples, Inc., together with its subsidiaries, operates as an office products company. The company's retail products include office supplies and services, business machines and related products, computers and related products, and office furniture. It also provides high-speed, color and self-service copying, other printing services, faxing, and pack and ship services.
In December, the Framingham, Massachusetts-based company reported that its third-quarter net income jumped to $269.38 million or $0.37 per share, much higher than $156.70 million or $0.22 per share in the year-ago quarter. While the company's net income rose 72%, earnings per share were up 68% on year. Adjusted earnings declined to $279.78 million or $0.39 per share from $300.35 million or $0.42 per share in the third quarter of 2008. Revenue fell 6% to $6.52 billion from $6.95 billion in the year-ago quarter. Analysts on average expected the company to report earnings of $0.38 per share on revenue of $6.45 billion.
The company is poised to benefit from a strong economic recovery, stronger-than-expected corporate spending and hiring. It continued to expand despite recession, opening about 50 new stores last year and plans to do the same in 2010.
For the fourth quarter of 2009, Staples expects GAAP earnings per share in the range of $0.34 to $0.36 per share. Excluding pre-tax integration and restructuring expense of approximately $20 million to $25 million, or $0.02 per share, the company expects to report adjusted earnings per share in the range of $0.36 to $0.38 in the quarter. The company also projects fourth-quarter sales to increase between 1% and 3% in US dollars, or to decrease in the low single-digits in local currency, compared to the same period of 2008. The company's total expenses are estimated to be between $205 million and $230 million in the fourth quarter and between $855 million and $880 million in fiscal 2009. Staples also reaffirmed its expectations for synergies related to the Corporate Express acquisition, building to $300 million annually over the three-year integration period.
Recently, Staples Inc. launched Staples Technology Solutions to meet a wide array of technology needs, including printer management, network services, and data center solutions, for small and medium-size enterprises as well as for large corporations.
Last month, the office supply retail store chain said that it has reached a $42 million global settlement in several retail wage and hour class action lawsuits related to the alleged mis-classification of its assistant store managers concerning overtime pay.
The company's stock currently trades at a forward P/E (fye 31-Jan-11) of 18.40 and PEG (5 yr expected) of 1.46. In terms of stock performance, Staples shares have gained nearly 64% over the past year.
Disclosure: Author doesn't own any of the stocks discussed here.
