Staples profit beats estimates, shares up

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November 14, 2012 11:49 PM EST

Staples Inc , the largest U.S. office supply chain, reported a slightly better than expected quarterly profit, as costs declined and sales in North America held up, although weakness in Europe and Australia hit overall revenue.

Staples shares were up 4 percent at $11.70 in premarket trade. They had fallen by about a 20 percent this year.

Staples' third-quarter adjusted profit beat estimates by 1 cent per share, although restructuring costs took it to a net loss.

Office supply chains are a good gauge of economic health because demand for their products is closely tied to white-collar employment rates.

Sales at Staples have suffered as corporate customers and other shoppers cut back on discretionary spending in the weak global economy, forcing the chain to keep a tight lid on costs.

But in the latest quarter, Staples reported North American delivery sales rose 1 percent even as retail sales remained flat.

Staples outlined in September plans to close 30 stores in North America and 45 stores in Europe, incurred impairment and restructuring charges of about $840 million in the quarter.

The company posted a net loss of $596.3 million, or 89 cents per share, for the third quarter, compared with a profit of $326.4 million, or 47 cents per share, a year earlier.

Excluding items, the company earned 46 cents per share.

Sales fell about 2 percent to $6.35 billion.

Analysts on average were looking for a profit of 45 cents per share on revenue of $6.45 billion, according to Thomson Reuters I/B/E/S.

The company reiterated its full-year profit and sales forecast.

(Reporting by Ranjita Ganesan, Chris Peters in Bangalore and Dhanya Skariachan in New York; Editing by Don Sebastian and Rodney Joyce)

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Copyright 2012 Thomson Reuters. All rights reserved.

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