Staples 3Q net income rises on cost controls

[November 18, 2010]  FRAMINGHAM, Mass. (AP) -- Staples Inc. says its third-quarter net income rose 7 percent despite only a small increase in revenue as the company gained new small-business customers and clamped down on expenses.

The largest U.S. office-supply seller said Thursday its net income rose to $288.7 million, or 40 cents per share, from $269.4 million, or 37 cents per share.

Excluding a restructuring charge, net income was 41 cents. That was a penny higher than the 40 cents per share analysts expected.

Revenue edged up to $6.54 billion from $6.52 billion. Analysts expected $6.53 billion. North American retail revenue rose 1 percent to $2.6 billion.

Consumers and small businesses cut back on all but the most essential office supplies during the recession, and continue to spend cautiously. But CEO Ron Staples said North American growth is continuing to "gain traction."

North American retail revenue rose 1 percent to $2.6 billion. But revenue in stores open at least a year fell 1 percent. The measure is considered a key gauge of a retailer's financial health because it excludes stores that open or close during the year.

Revenue from its North American delivery unit, which caters to small business customers, rose 3 percent in the U.S. to $2.5 billion, helped by acquiring new customers.

Staples, which bought Dutch office supply company Corporate Express NV, said international revenue fell 4 percent to $1.4 billion, mainly because of a 2 percent decrease in revenue in stores open at least a year.

The Framingham, Mass., company expects fourth-quarter revenue to rise in the low single digits and net income between 39 cents to 41 cents per share, while analysts expect net income of 40 cents per share.

It predicts full year revenue to also rise in the low single digits on net income of $1.27 to $1.29 per share. Analysts expect $1.28 per share.

[Associated Press]

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