Office-products retailer Staples Incorporated (SPLS) posted on Tuesday a drop in fourth-quarter earnings of 18%, citing continued weakness in corporate spending, so where does that leave ODP, with small businesses being out of operation some of them.

Staples said weak spending in the business sector is most likely to continue.

Business customers “remained cautious with discretionary purchases,” Ron Sargent, chief executive officer, commented during a conference call following the earnings report release. Sales of computers, copiers and furniture were disappointing, signaling a strong rebound in the U.S. economy is not likely.

Staples—the top selling office-products retailer—now says that earnings for the year will fall short of analysts’ estimates. The company’s bleak outlook for 2010 comes amid hefty capital spending totaling $450 million for expansion plans during the year, including new store openings, remodeling, systems and upgrades to its distribution networks in North America and Europe.

Staples fought the severe economic decline by promoting lower-cost merchandise, rolling out more higher-margin basic supplies lines, and offering promotional discounts on high-ticket items.

Having survived this far in the downturn, the company’s smaller rival have not weathered the storm. The segment now faces stiff competition from discount retailers who have attracted price-sensitive shoppers seeking discounts against which Staples cannot effectively compete.

Projected full-year earnings are now projected to reach between $1.23 and $1.33 per share, compared with Wall Street’s mean estimate of $1.40.

Staples expects current quarter results to include earnings per share of between 25 and 27 cents, falling slightly below the 27 cents forecast by analysts polled by Thomson Reuters. The company expects sales to increase by a mid-single-digit percentage rate, quarter-over-quarter, and a low-single-digit percentage rate rise for the year. Wall Street expects a 3% increase for both the quarter and the year

ODP:

US

Office Depot sales fall 4.7%5 May, 2010 | By Planet Retail

Office Depot saw sales fall 4.7% to $3.1bn (£1.9bn) during the three months to March 27, 2010. Operating profit came in at $56m (£36m), compared with a loss of $60m (£39m) in the first quarter of 2009.

Net profit was $29m (£19m), an improvement on the $55m (£36m) loss in the same quarter a year earlier.

This will increase and drop since UK is going through a major recession now.

odp, staples stock

What a rough week for the stock market. The big players lost a little of their profits and the newbies got smoked , probably on margain. Mad Money stated on friday, that he believes the market is going to hit 8500 and we agree.

We look at the market to continue going down, as this Europe news is not new, its months old. The us ecomony is getting better, but when 14% of the people in Las Vegas are out of a job and 9.5% nationwide thats not good for retail and consumer buys.

The wealthy people do not buy stuff when the economy is down, but stocks, so with that said who is going on trips this summer and buying gifts and nick nacks, not many.

Before may 7th, before the market dropped, we covered all buys and shorted the market. Here is what we shorted. We increased our short position on AOL at $21.50 and we shorted JDSU at $11.00, we shorted TIVO at $16.95 and we shorted ODP ( office depot corp, the worse company still existing).

Despite AOL hiring Microsoft executive and the smartest in the world, you cannot drive a car thats broken and out dated, as AOL is.

AOL, is a loosing proposition and their only thought of for their aol instant messenger. We believe, depsite the other transaction that occured to boost AOl stock, when Tim Armstrong bought a whopping $11mm worth of AOL in the midst of a colapsing economy, we believe AOL will reach $16 in 14 days.

The buyback from the AOL Ceo, shows he thinks the stock is great value, which I believe he over paid $15 a share, as the value should be $6 now a share for AOL.

aol, aol ceo, aol shares buy back, aol tim armstrong, buy aol, jdsu, tivo