Prior to the opening bell on August 25, the largest U.S. office supply retailer, Staples Inc. (SPLS) announced that the company’s profits during the 2Q plummeted, due in large part to excessive charges accumulated from the purchase of Corporate Express.

For the quarter ending August 1, Staples booked net income of $92.4M, or $0.13 per share, a sharp decline from the previous year’s earnings of $150.2M, or $0.21 per share, a drop in profits year-over-year of more than 38%.

Excluding a charge of $30M for integration and restructuring costs, Staples would have recorded a quarterly profit of $0.16 per share, with net income coming in at $11.82M.

Revenues for the period posted a solid increase despite recessionary pressures, advancing from $5.07B to $5.53B, an increase of more than 9%. Although overall sales figures increased, same store revenues slipped 5% during the 2Q as the average size of sales orders decreased.

Nevertheless, same store sales totals came in better than the previous year’s results, which was an 8% decline.

CEO Ronald Sargent commented on the company’s results, “We are feeling like maybe the economy is coming back a bit. We have seen sequential improvement now for the last ... three or four quarters. And I think we think that's a good indicator of the future health of our business.”

Analysts, in the meantime, were looking for the office products company to book net income of $0.16 per share, with revenues totaling $5.55B.

Looking further into the company’s report, Staples currently operates in three business segments, North American Delivery, North American Retail, and International Operations.

Within their North American Delivery unit, the company witnessed sales during the quarter advance from $1.97B to $2.32B, an increase in revenues of more than 18%. Throughout the North American retail division, sales retreated from $2.09B to $1.97B, a drop of more than 5% year-over-year.

The drop in sales within the retail unit was attributed to a continued weakness in durable sales, especially office furniture and business machines.

Quarterly sales for the company’s International Operations unit came in at $1.24B, up from last year’s 2Q totals of $1.02B, an increase of more than 21%. Comparable store sales throughout Europe posted a decrease in revenues of just over 3%, while sales within Germany and the UK managed to post positive increases.

Throughout the quarter, Staples viewed overall operating expenses of $1.22B, up 10% from the previous year’s 2Q of $1.11B in costs. The increase was a direct result of the company’s increase in costs related to selling, general and administrative expenses, as well as amortization of intangibles.

During the first six months of the year, Staples managed to post a net profit of $235.4M, or $0.17 per share, down substantially from the prior year’s tally of $362.5M, a drop in earnings of more than 35%. Despite the drop in earnings year-over-year, overall sales advanced for the company, climbing from $9.96B to $11.35B, a jump of nearly 14%.

Looking ahead to the upcoming 3Q, Staples’ representatives would not provide any information pertaining to earning or sales projections. However, they did state that the company is looking to post quarterly expenses between $210M and $235M for the quarter, with yearly expenses coming in between $855M and $905M.

Following the company’s announcement, shares of SPLS slipped nearly 2% by the end of the August 25 trading session, losing $0.40 to end the day at $21.79 per share. Over the past 52 week, the stock has hit a high of $26.43, while dipping as low as $13.57 per share.