United Stationers Inc.

United Stationers Inc. (USTR) has surprised on the Zacks Consensus Estimate 4 consecutive quarters by an average of 28.24% as inventory reduction has boosted the bottom line. The company is trading with a forward P/E of 13.32.

Company Description

United Stationers distributes business products in the United States and Mexico from 65 distribution centers and 30,000 reseller customers.

The company provides over 100,000 items from 1,000 manufacturers, including technology products, traditional office products, janitorial and breakroom supplies, office furniture, and industrial supplies.

United Stationers distribution system allows it to ship overnight to customers in more than 90% of the United States and major cities in Mexico.

United Stationers Surprised by 45.26% in the Third Quarter

On Oct 29, United Stationers reported third quarter results and once again easily surprised on the Zacks Consensus Estimate. Earnings per share were $1.38 compared with the Zacks Consensus of 95 cents per share. The consensus, however, was based on only 1 covering analyst.

Sales fell by 6.8% to $1.25 billion from $1.34 billion. The global recession continues to impact the company's bottom line but there are glimmers of light among various product segments.

The office products and furniture categories saw a slower rate of year-over-year decline compared with the second quarter. The janitorial/breakroom segment saw growth due to H1N1 concerns and more focus by customers on flu-related products.

The weakest segment was the industrial supplies segment which saw sales slow due to distributor destocking and continuing weakness in U.S. manufacturing, oil and gas pipeline and commercial construction spending.

Outlook for 2009

The company has been managing its business during the recession by reducing inventories. United Stationers said it saw some stabilization in its business during the third quarter but is worried about continuing declines in employment and weak manufacturing. However, October sales tracked about even with the year ago period.

Flu-related products continue to give sales a boost.

Zacks Consensus Estimates Rise

Given the fourth big beat in a row, the 1 analyst has moved to raise estimates on the fourth quarter and the full year.

The fourth quarter Zacks Consensus Estimate jumped 9 cents to 85 cents in the last 30 days.

The 2009 Zacks Consensus Estimate jumped 16% to $3.77 from $3.25 over the same period.

Value Fundamentals

United Stationers is a Zacks #1 Rank (strong buy) stock. It is trading with a price-to-book of 1.82. The company also has a strong 5-year average return on equity (ROE) of 14.71%.

Read the full analyst report on USTR