United Stationers Shares Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of business-supplies expert United Stationers (NAS: USTR) were getting shredded by Mr. Market today, falling as much as 10% in intraday trading after the company reported fourth-quarter results.

So what: The headline for United Stationers' quarterly earnings report described the company's results as "solid." "Great" or "outstanding" the report wasn't, but "solid" probably wasn't too much of a stretch. On an adjusted basis, the company's earnings per share increased 10% year over year to $0.64, while sales inched up 1.3% to $1.2 billion. The numbers matched analysts' estimates on both the top and bottom line.

Now what: So what is it that sent the stock slip-sliding in today's trading? It was all about the outlook. Management said that it's taking "optimization" actions that will reduce profits and cash flow. In the first quarter of the year, the company said it will take a pre-tax charge of $7 million to $8 million, and it forecasted that there will be cash outflows for both 2012 and 2013. That's a big change from recent years, as the company has produced significant positive cash flow.

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At the time this article was published Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributorMatt Koppenhefferhas no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter,@KoppTheFool, or onFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.

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