Staples Inc. (SPLS), the world's largest office products company, reported 7 percent rise in quarterly profit, which also came in above market estimates, as it managed to keep a lid on its costs.
Massachusetts-based Staples posted net income of $288.7 million, or 40 cents per share, for the third quarter ended Oct.30. This compares with net income of $269.3 million, or 37 cents per share, in the same quarter last year.
Excluding restructuring and integration expenses, the company earned 41 cents per share.
Sales increased slightly to $6.54 billion from $6.52 billion in the corresponding quarter prior year.
Analysts expected earnings of 40 cents per share on revenue of $6.53 billion, according to Thomson Reuters.
Operating costs during the quarter declined to $1.29 billion from $1.30 billion a year ago and cost of goods sold dropped to $4.73 billion from $4.75 billion last year.
North American Delivery sales for the third quarter rose 3 percent to $2.5 billion and North American Retail sales grew 1 percent to $2.6 billion. Comparable store sales for the retail division declined one percent. North American Retail opened 10 stores and closed one store, ending the third quarter of 2010 with 1,897 stores in North America.
However, international sales were $1.4 billion, a decrease of 4 percent in US dollars and 1 percent in local currency over last year. The International business ended the third quarter of 2010 with 381 stores.
For the fourth quarter, company expects to earn 38 to 40 cents per share on a GAAP basis, and earn 39 to 41 cents per share, excluding items.
For the full year 2010, the company expects GAAP earnings in the range of $1.22 to $1.24 per share and adjusted earnings of $1.27 to $1.29 per share. Staples projects annual sales to increase in the low single-digits compared to the full year 2009.
Wall Street analysts expect Staples to earn 40 cents per share for the fourth quarter and $1.28 per share for the full year.
Shares of Staples closed Wednesday's regular trading session at $20.08 on Nasdaq. For the past 52-weeks, they have been trading in the range of $17.45 to $26.