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 user 2008-10-16 at 11:32:01 am Views: 78
  • #20581
    Office suppliers slip on economic woes
    CHICAGO -Shares of the nation’s three largest office supply chains tumbled Monday after analysts lowered earnings estimates because of economic headwinds.Shares of Office Depot Inc.  and Staples Inc. both hit 52-week lows during trading, amid broader market declines driven by concerns that the U.S.-backed bailout effort won’t stop a global credit crisis.Goldman Sachs  analyst Matthew Fassler maintained his “Neutral” rating on the two, along with competitor OfficeMax Inc. , but lowered 2008 and 2009 earnings per share estimates for the trio.

    Fassler told investors he expects Delray Beach, Fla.-based Office Depot to earn 48 cents per share in 2008, down from his previous estimate of 58 cents per share. For 2009, he expects earnings of 70 cents per share, down from 80.” the brunt of the macro hit, but softer employment trends and tougher European backdrop represent big headwinds,” Fassler wrote.Analysts surveyed by Thomson Reuters expect Office Depot to earn 56 cents per share in 2008 and 68 cents per share the following year.

    Meanwhile, Fassler lowered his 2008 forecast for OfficeMax to $1.36, from $1.40, while cutting his 2009 projection to 95 cents from $1.05.”Revenue was under pressure before macro slowdown deepened (and is) likely to be magnified,” he told investors, adding that the company will likely take a hit from a strong U.S. dollar as well.Wall Street analysts expect the suburban Chicago-based retailer to earn $1.65 in 2008 and $1.53 the following year.

    Staples can still tap into cost savings from its recent acquisition of Corporate Express, but the Framingham, Mass.-based company will likely still feel the impact of the economic slowdown in both its U.S. and overseas operations, Fassler wrote.He cut his 2008 projections for Staples to $1.37 per share from $1.38 and lowered his 2009 forecast to $1.70 from $1.73 per share.Analysts expect Staples to earn $1.44 this year and $1.71 in 2009.Staples shares fell $1.31, or 6.6 percent, to $18.69 in afternoon trading while OfficeMax sank 53 cents, or 7.5 percent, to $6.51. Office Depot climbed 16 cents, or 3.3 percent, to $5.00 after falling to $4.53 earlier in the session.