Staples Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Staples (NASDAQ:SPLS) will unveil its latest earnings on Wednesday, November 14, 2012. Staples operates a chain of retail stores selling office products.

Staples Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 45 cents per share, a decline of 4.3% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 49 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 45 cents during the last month. Analysts are projecting profit to rise by 0.7% versus last year to $1.36.

Past Earnings Performance: Last quarter, the company fell short of estimates by 0 cents, coming in at net income of 18 cents per share against a mean estimate of profit of 22 cents. The company fell in line with expectations in the first quarter.

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A Look Back: In the second quarter, profit fell 31.7% to $120.4 million (18 cents a share) from $176.4 million (25 cents a share) the year earlier, missing analyst expectations. Revenue fell 5.5% to $5.5 billion from $5.82 billion.

Stock Price Performance: Between September 13, 2012 and November 8, 2012, the stock price had fallen 67 cents (-5.6%), from $11.96 to $11.29. The stock price saw one of its best stretches over the last year between February 9, 2012 and February 23, 2012, when shares rose for 10 straight days, increasing 4.4% (+65 cents) over that span. It saw one of its worst periods between August 14, 2012 and August 28, 2012 when shares fell for 11 straight days, dropping 20.8% (-$2.79) over that span.

Analyst Ratings: There are mostly holds on the stock with eight of 15 analysts surveyed giving that rating.

Key Stats:

After experiencing income drops the past two quarters, the company is hoping to use this earnings announcement to rebound. Net income dropped 5.6% in the first quarter and then again in the second quarter.

On the top line, the company is hoping to use this earnings announcement to snap a string of two-straight quarters of revenue declines. Revenue fell 1.1% in the first quarter and dropped again in the second quarter.

Wall St. Revenue Expectations: Analysts predict a decline of 1.7% in revenue from the year-earlier quarter to $6.46 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.56 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.6 in the first quarter to the last quarter driven in part by a decrease in current assets. Current assets decreased 2% to $6.12 billion while liabilities rose by 0.7% to $3.93 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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