UPDATE 1-United Stationers posts lower profit in quarter

Fri Feb 13, 2009 12:06am GMT

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* Q4 EPS 95 cents

* Q4 sales up 2.3 pct to $1.1 bln

* Q1 sales to date down 8 pct

* Shares close up 1 pct to $28.31

SAN FRANCISCO, Feb 12 (Reuters) - Wholesale distributor United Stationers Inc (USTR.O) said on Thursday quarterly net profit fell due to lower gross margins and slightly higher costs.

The company, which also stocks janitorial and industrial supplies, said net income in its fourth quarter was $22.6 million, or 95 cents per share, down from $28.3 million, or $1.12 per share, a year earlier.

Three analysts polled by Reuters Estimates had been expecting earnings of 72 cents per share. It was not immediately clear if that was comparable with United Stationers' results.

United Stationers, which recently announced a 4 percent cut in its workforce, said revenue rose 2.3 percent to $1.1 billion in the quarter

Sales were boosted by its ORS Nasco division, the wholesale distributor for welding and other products that the company acquired in December 2007.

Gross profit margins were 15.4 percent of sales, down from 16.1 percent a year earlier, while operating expenses rose to 11.7 percent of sales from 11.5 percent, due to costs from ORS Nasco.

To date, first-quarter revenues are down about 8 percent, the company said.

Regarding its cost reductions announced last month, United Stationers said the company would save approximately $13 million in 2009 before the previously announced first-quarter charge of $2.5 million to $3.5 million.

Other cost reductions targeting labor-related and other expenses are expected to save an additional $10 million in 2009, the company said.

The company's shares closed up 1 percent, or 30 cents, to $28.31 on the Nasdaq, before the news was released. (Reporting by Alexandria Sage; Editing by Phil Berlowitz)

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