Staples Inc.'s first-quarter net income fell 6 percent, burdened by expenses related to job cuts and a contract settlement as revenue overseas weakened.
FRAMINGHAM, Mass. (AP) — Staples Inc.'s first-quarter net income fell 6 percent, burdened by expenses related to job cuts and a contract settlement as revenue overseas weakened.
Its shares declined more than 2 percent in early premarket trading.
The biggest U.S. office supply retailer reported Wednesday that its net income fell to $187.1 million, or 27 cents per share, for the period ended April 13, down from $198.2 million, or 28 cents per share, a year earlier.
The current quarter included $28 million in expenses mostly related to job cuts in North America, Europe and Australia and the settlement of a contract dispute tied to the Corporate Express acquisition. The expenses reduced earnings by about 3 cents per share.
Taking out these items, earnings amounted to 30 cents per share. This was in line with the expectations of analysts polled by FactSet.
Revenue dipped 1 percent to $6.1 billion from $6.17 billion, missing Wall Street's estimate of $6.18 billion.
Staples' stock shed 39 cents, or 2.6 percent, to $14.36 ahead of the market open.
North American retail sales were basically flat at $2.3 billion, while revenue at stores open at least a year was flat as order size and traffic were unchanged.
Revenue for the North American delivery segment, which caters to businesses, rose 2 percent to $2.6 billion on better sales of facility and break room supplies and increased revenue from copy and print and promotional products.
International sales dropped 8 percent to $1.2 billion on softness in Australia and Europe.
Staples, which is based in Framingham, Mass., still expects full-year earnings to post a high single-digit percentage increase and revenue to climb in the low single-digits.
Analysts predict 2012 earnings of $1.50 on revenue of $25.43 billion.
