United Stationers Shares Plunged: What You Need to Know
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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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