Market Report -- Short Stories (SPLS)
November 27, 2009 9:25 AM ET
Staples: 3Q09E; market wants too much - FBR Capital Mkts . FBR Capital Mkts thinks the equity mkt is ahead of itself heading into Staples' 3Q09E earnings (12/1), and its EPS est ($0.36) is below consensus ($0.38). The difference between firm and the Street in the short run appears to center around the sheer math of accounting for the difficult YOY comparison against last yr's, when both the "core" NAD (North American delivery) and international segments of the business reported positive decremental margins, despite sales declines. This at the time was relatively extraordinary, particularly within NAD, as SPLS reduced costs; this was also coincident with the first full qtr of the July 2008 CXP acquisition, related synergies there, the need to solidify debt financing for the deal in Jan. (pre 4Q08), and the Oct. 2008 analyst meeting. In the short term, FBR avoids the shares heading into next week's earnings.
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