Analysts say easing economic concerns should help Staples 4th-quarter results

Earnings Preview: Staples Inc.

FRAMINGHAM, Mass. — Office supply retailer Staples Inc. reports its fourth-quarter results before the market opens on Tuesday.

WHAT TO WATCH FOR: Any sales improvement. The recession caused businesses and consumers to cut their spending on office supplies as they reduce their overall costs. But as concerns about the economy and job security ease, consumers have begun to shop more.

Last quarter, Staples reported its first retail sales increase in five quarters, a modest 1 percent rise.

Still, contract sales have remained weak as small businesses are slower to recover from the recession.

WHY IT MATTERS: Staples is a good measure of how both consumers and small businesses are responding to the economy since it serves both segments.

WHAT’S EXPECTED: Analysts polled by Thomson Reuters expect Staples to earn 39 cents per share on revenue of $6.3 billion.

LAST YEAR’S QUARTER: One-time items in last year’s fourth quarter included charges linked to its acquisition of Corporate Express NV the previous July and the reversal of a $57 million non-cash charge recorded in the third quarter.

Excluding those items, the company’s adjusted profit was $256 million, or 36 cents per share. Sales climbed 16 percent to $6.17 billion from $5.32 billion, helped by the addition of Corporate Express.