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Staples’ Earnings Miss the Mark; Outlook Slashed; Shares Plunge (SPLS)

Office supply retailer Staples, Inc. ( SPLS ) on Wednesday posted lower-than-expected first quarter earnings and cut its full-year forecast, sending its shared plummeting in premarket trading.

The Framingham, MA-based company reported first quarter net income of $198.2 million, or 28 cents per share, compared with $188.8 million, or 26 cents per share, in the year-ago period.

Revenue rose 2% from last year to $6.17 billion.

On average, Wall Street analysts expected a higher profit of 32 cents per share, on higher sales of $6.2 billion.

Looking ahead, the company slashed its full-year 2011 earnings forecast to a range of $1.35 to $1.45 per share, down from a prior outlook of $1.50 to $1.60. Analysts currently expect $1.53 per share for the year.

Staples shares fell $3.21, or -16%, in premarket trading Wednesday.

The Bottom Line

Shares of Staples ( SPLS ) have a 2.04% dividend yield, based on last night's closing stock price of $19.65. The stock has technical support in the $15-$16 price area. If the shares can rebound, we see overhead resistance around the $19-$21 price levels.

Staples, Inc. ( SPLS ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 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 .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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