OFFICE-DEPOT / OFFICE-MAX / STAPLES SLIP ON ECONOMIC WOES

[Anonymous]

http://www.forbes.com/feeds/ap/2008/10/06/ap5514105.html?partner=alerts
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.

[Author]

October 16, 2008 at 11:32 AM