Staples' Dividend Hike Cannot Hide the Problems

India call centerStaples Inc. (NASDAQ: SPLS) reported fourth-quarter and full-year 2012 results before markets opened this morning.

For the quarter, the office supplies retailer posted adjusted diluted earnings per share (EPS) of $0.46 and $6.57 billion in revenues. In the same period a year ago, Staples reported EPS of $0.41 on revenue of $6.37 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.45 and $6.72 billion in revenue.

For the full year, Staples reported adjusted EPS of $1.39 on revenues of $24.38 billion, compared with EPS of $1.37 and revenues of $24.67 billion in fiscal year 2011. The consensus estimates called for EPS of $1.38 on revenues of $24.68 billion.

On a GAAP basis, Staples posted quarterly EPS of $0.14, compared with last year's EPS of $0.41. The excluded items included European store closures and restructuring, early extinguishment of debt, the termination of a joint venture in India and pretax income from the quarter's extra week. One-time charges totaled $181 million..

In a separate announcement, Staples said it is increasing its quarterly dividend by 9%, from $0.11 to $0.12 per share. That is something of a consolation prize for an indifferent performance for the year.

Staples guided 2013 sales up in the low single-digits, based on the 52-week total for 2012 of $23.9 billion. Full-year diluted EPS are forecast at $1.30 to $1.35. Analysts had estimated EPS for 2013 of $1.43 on sales of $24.3 billion.

The pending merger between Office Depot Inc. (NYSE: ODP) and OfficeMax Inc. (NYSE: OMX) is likely to have only a marginal effect on Staples' business. The bricks-and-mortar part of the business saw same-store sales drop 5%, and sales in the online store rose only 7%. This does not look good for competing with Staples' real rival: Amazon.com Inc. (NASDAQ: AMZN).

Shares are down about 5.2% in premarket trading to $12.60, in a 52-week range of $10.57 to $16.93. Thomson Reuters had a consensus analyst price target of $14.10 before today's results were announced.


Filed under: 24/7 Wall St. Wire, Dividend, Earnings, Retail, Services Tagged: AMZN, ODP, OMX, SPLS
Read Full Story

Markets

DJIA 21,012.42 74.51 0.36%
NASDAQ 6,163.02 24.31 0.40%
S&P 500 2,404.39 5.97 0.25%
NIKKEI 225 19,742.98 129.70 0.66%
HANG SENG 25,428.50 25.35 0.10%
DAX 12,642.87 -16.28 -0.13%
USD (per EUR) 1.12 0.00 0.34%
USD (per CHF) 0.97 0.00 -0.31%
JPY (per USD) 111.55 -0.40 -0.36%
GBP (per USD) 1.30 0.00 0.08%

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.