Staples Earnings Rise 40%, Sales Flat

Staples said second-quarter net income rose 40% to $130 million, or 18 cents a share, even though sales were flat at $5.5 billion.
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FRAMINGHAM, Mass. (

TheStreet

) --

Staples

(SPLS)

, the office products retailer, said second-quarter net income rose 40% to $130 million, or 18 cents a share, even though sales were flat at $5.5 billion.

Adjusted earnings in the quarter were 20 cents a share, in line with the estimates of analysts surveyed by Thomson Reuters.

Staples said Thursday it no longer expects that Congress will extend the provisions that allow for the deferral of income tax on certain foreign earnings. Therefore, it expects its effective tax rate for the third quarter and fiscal year to be 37.5%, which will impact fiscal 2010 earnings by 6 cents a share.

Staples sees third-quarter sales rising in the low single digits with adjusted earnings of 39 cents to 41 cents a share. Staples expects fiscal-year adjusted earnings of $1.25 to $1.29 a share.

-- Reported by Joseph Woelfel in New York.

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