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 user 2008-10-16 at 11:32:53 am Views: 74
  • #20806
    Office suppliers slip on economic woes
    -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.

    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.

    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.