STAPLES INC STOCKS TUMBLE 14 % , MOST IN 11 YEARS

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STAPLES INC STOCKS TUMBLE 14 % , MOST IN 11 YEARS

Staples Inc. (SPLS), the world’s largest office-supply retailer, declined the most in 11 years after cutting its full-year earnings forecast.Staples tumbled $2.83, or 14 percent, to $16.82 at 10:18 a.m. in Nasdaq Stock Market trading, after earlier dropping as much as 16 percent for the biggest intraday decline since March 2000. Before today, the shares had fallen 14 percent this year.Profit for fiscal 2011 will rise to as much as $1.45 a share, the Framingham, Massachusetts-based company said today in a statement. Analysts had projected $1.54, the average of 16 estimates compiled by Bloomberg.Staples, led by Chairman and Chief Executive Officer Ron Sargent, said it’s adopting a “more conservative” outlook for earnings and sales after first-quarter results were weaker than expected. The company predicts “very little improvement” in the economy this year, according to the statement.

Sales this year will increase in the low single digits on a percentage basis. In March, Staples projected full-year earnings to increase to as much as $1.60 a share on sales in the low to mid-single digits.First quarter net income rose 5 percent to $198.2 million, or 28 cents a share, from $188.8 million, or 26 cents, a year earlier. Analysts projected 32 cents, the average of 15 estimates compiled by Bloomberg.

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May 18, 2011 at 10:17 AM