United Stationers, Inc.

United Stationers is controlling costs in a tough economic environment as it grew sales by 9.7% in the second quarter. The company has surprised on estimates 4 consecutive quarters by an average of 6.33%. United Stationers forward P/E if 11.63.

Company Description

United Stationers Inc. (USTR - Snapshot Report) distributes business products in the United States and Mexico from 67 distribution centers and 30,000 reseller customers.

The company handles over 100,000 items, including technology products, traditional office products, janitorial and breakroom supplies, office furniture, and industrial supplies. USTR is able to ship overnight to customers in more than 90% of the United States and major cities in Mexico.

On Sep 2, USTR completed its acquisition of New Jersey-based distribution company Emco Distribution LLC for $15 million, which was funded under the company's existing credit agreement.

United Stationers Beat Wall Street Second Quarter Estimates by 6.67%

On July 31, USTR reported second quarter earnings that surprised on estimates by 6 cents per share. Earnings per share were 91 cents per share compared with 84 cents per share in the year ago period. Adjusted for items, EPS was 96 cents per share. Analysts expected 90 cents per share.

Sales jumped 9.7% to $1.25 billion. 7% of the growth came from ORS Nasco, which USTR acquired in Dec 2007. USTR said sales were also helped by the timing of the Easter holiday, which fell in the first quarter versus the second quarter the year before.

The company stated it saw a 14.4% increase in janitorial/breakroom sales and a modest increase in office products and technology. Furniture sales declined 8% in the quarter.

USTR Encouraged by Second Quarter Results

United Stationers said it saw July sales growth trends which were in line with the year-to-date June growth rate. The company is focused on cost controls and working capital management to maintain its growth projections for 2008. USTR does expect higher product cost inflation in the second half of the year based on previously announced supplier price increases.

Estimates Rise for the Third Quarter and the Full Year

USTR has only one covering analyst, but that analyst has been raising estimates for the third quarter and the full year in the last month. For the quarter, estimates rose 10 cents to $1.04 from 96 cents per share.

For the full year, estimates rose 16 cents to $3.96 from $3.80 per share.

Value Fundamentals

United Stationers is a Zacks #1 Rank (Strong Buy) stock. It has a forward P/E of 11.63. USTR's price-to-book is 2.09. The company has a solid five year average return on equity (ROE) of 13.87%.