Lower Q2 earnings expected from Staples

For the quarter in which Staples declared a dividend of 8.25 cents per share, appointed a new senior vice president of in charge of global strategy, and saw other senior executive changes, analysts surveyed by Thomson Reuters expect the Framingham, Mass.-based company to report that earnings fell 23.8% from a year ago to $0.16 per share. That's also down from better-than-expected $0.22 per share in the first quarter. However, revenue for the second quarter is expected to be 9.1% higher to $5.5 billion. Earnings have been in line with estimates in four of the past five quarters.

Analysts so far expect results in the third quarter (which includes the back-to-school period) to be better sequentially, but still lower than a year ago.

Staples' earnings multiple is a hefty 19x, and its long-term EPS growth forecast is 14.2%, which is better than those of rivals OfficeMax Inc. (NYSE: OMX) and Office Depot Inc. (NYSE: ODP). Net cash flow from operations has been increasing over the past year, and short interest fell in July, but the company reported more long-term debt in its first quarter than in any other quarter in the past year. Yet the First Call consensus recommendation remains to buy SPLS; Zacks expects an upside surprise from Staples.

Shares have risen about 16% in the past three months but are still about 8% lower than a year ago.