Net income at Staples declines 5%

Staples Inc.’s fiscal third-quarter profit slipped 5% as consumers spent less on office supplies, but sales of highly profitable items such as ink cartridges grew, and Staples’ performance beat Wall Street expectations.

Investors sent shares of the world’s largest office products supplier up 10.6% on Tuesday, a week after rival Office Depot Inc. saw its shares drop 6% when its third-quarter numbers fell.

Office Depot’s recent problems helped trigger a 16% decline in Staples’ shares over the last four weeks, and Staples’ stronger results Tuesday topped investors’ low expectations, said Anthony Chukumba, an analyst with FTN Midwest Securities.

Staples said net income for the three-month period ended Nov. 3 was $274.5 million, or 38 cents a share, compared with $289.9 million, or 39 cents, a year earlier. Sales grew 9% to $5.17 billion.

The latest quarter’s profit was hurt by a $38-million charge from a settlement of an employee class-action lawsuit by assistant store managers in California, who alleged they were misclassified as exempt from overtime pay.

The settlement, which Staples disclosed Nov. 3, shaved 4 cents a share from the company’s profit.

Not counting that expense, the profit was 42 cents a share, beating the consensus forecast of analysts surveyed by Thomson Financial, who had expected 40 cents.

Shares of Framingham, Mass.-based Staples rose $2.09 to $21.85.