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Office supply retailer Staples, Inc. ( SPLS ) on Wednesday posted a sharp downturn in second quarter earnings and lowered its full-year outlook, sending its shares plunging more than 16% in premarket trading.

The Framingham, MA-base company reported second quarter net income of $120.4 million, or 18 cents per share, compared with $176.4 million, or 25 cents per share, in the year-ago period. Last year's results included a favorable one-time tax benefit.

Revenue fell 5.5% from last year to $5.5 billion, partially hurt by foreign currency fluctuations.

On average, Wall Street analysts expected a higher profit of 22 cents per share, on larger revenue of $5.72 billion.

Looking ahead, SPLS said it now expects full-year 2012 profits to rise in the low single-digits from last year, with sales flat from 2011. It had previously predicted a high single-digit gain in profit and a low single-digit rise in sales.

Staples shares plunged $2.17, or -16%, in premarket trading Wednesday.

The Bottom Line
Shares of Staples ( SPLS ) have a 3.27% dividend yield, based on last night's closing stock price of $13.46. The stock has technical support in the $11 price area. If the shares can firm up, we see overhead resistance around the $14 price level.

Staples, Inc. ( SPLS ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.0 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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