Staples 4Q net rises but misses expectations

[March 02, 2011]  FRAMINGHAM, Mass. (AP) -- Staples says its net income rose 18 percent on lower operating expenses, but winter storms kept results under analyst expectations.

Staples, based in Framingham, Mass., also offered first-quarter guidance slightly below expectations.

Net income rose 18 percent to $274.7 million, or 38 cents per share. That compares with $233.9 million, or 32 cents per share, in the same period last year. Excluding an integration and restructuring expense, net income was 39 cents per share.

Analysts expected net income of 41 cents per share, according to FactSet.

Revenue rose less than 1 percent to $6.42 billion. Analysts expected $6.46 billion.

Staples says bad weather cost it $70 million in sales and 3 cents per share in net income. Markdowns to clear excess inventory during the quarter hurt earnings by an additional 2 cents per share.

"While the fourth quarter was challenging primarily due to the impact of winter storms, sales have recovered in the first quarter of 2011," said CEO Ron Sargent.

Revenue in stores open at least a year fell 2 percent. The measure is considered a key gauge of a retailer's fiscal health because it excludes stores that open or close during the year.

Office suppliers are are slowly recovering as shoppers and small businesses go back to spending more on office supplies.

Revenue in its North American delivery segment, which serves small business, rose 3 percent to $2.5 billion. Retail revenue rose less than 1 percent to $2.6 billion. Sales of computers were weak, offset by stronger sales of paper and services.

International revenue fell 3 percent to $1.4 billion.

In the first quarter, Staples expects net income of 30 cents to 32 cents per share, while analysts expect 33 cents per share. It expects revenue to rise by a low-single-digit percentage.

For the full year, Staples predicts a low- to mid-single digit increase in revenue and net income of $1.50 to $1.60. Analysts expect net income of $1.55 per share.

[Associated Press]

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.