Business
* Quarterly earnings 18 cents/share vs Wall St view 22 cents
* Weak demand in North America, Europe, Australia hurt
* Quarterly sales fall, miss analysts' estimates
* Staples sees flat sales for the year
* Shares fall 12.3 percent
By Dhanya Skariachan
Aug 15 (Reuters) - Staples Inc reportedlower-than-expected quarterly results on weak demand in NorthAmerica, Europe and Australia, prompting the largest U.S. officesupply chain to forecast flat sales for the fiscal year. Itsshares fell more than 12 percent.
Current expectations for the year assume slower growth inthe U.S. economy and continued weakness in Europe, Staples saidon Wednesday.
Many investors look at office supply retailers as abarometer of economic health because demand for their productsis closely tied to white-collar employment rates.
Staples said its sales had fallen 5.5 percent to $5.50billion in the second quarter ended on July 28, well below theanalysts' average estimate of $5.72 billion.
International sales dropped 18 percent to $1.1 billion, hurtby weakness in Europe, which is reeling from an economic crisis,and lackluster demand in Australia.
Staples' news came after Office Depot Inc, the No. 2U.S. office supply chain, reported a wider-than-expectedquarterly loss last week on tepid demand in Europe and theUnited States. Third-ranked OfficeMax Inc has said itexpects its third-quarter sales to be flat or just slightlyhigher than a year earlier.
Sales at these chains have suffered as corporate customersand other shoppers cut back on discretionary spending amiduncertainty in the global economy. As a result, the companieshave had to rely on cost cuts to boost earnings in recentquarters.
Staples' net income fell to $120.4 million, or 18 cents ashare in the second quarter, from $176.4 million, or 25 cents ashare, a year earlier. Analysts on average were expecting aprofit of 22 cents a share, according to Thomson ReutersI/B/E/S.
Staples now said it expected full-year earnings per share torise at a low single-digit percentage rate from last year's$1.37.
Sales at stores open at least a year fell 2 percent in NorthAmerica, as customer traffic fell and average order size wasflat. Sales of computers and core office supplies wereparticularly weak, Chief Executive Officer Ron Sargent said.
Shares of Staples were down 12.3 percent at $11.80 intrading before the market opened.
