Office Depot Q3 Profit Matches Estimates

(RTTNews) - Office Depot, Inc. (ODP) reported that its third-quarter adjusted operating income increased almost 30% year-over-year, driven by North American Retail same-store sales growth of 3%, and substantial synergies and efficiencies generated from the integration of Office Depot/OfficeMax and European restructuring. Adjusted net income attributable to Office Depot was $87 million, or $0.16 per share, compared to $52 million, or $0.10 income per share, previous year. On average, 13 analysts polled by Thomson Reuters expected the company to report profit per share of $0.16 for the quarter. Analysts' estimates typically exclude special items.

Roland Smith, CEO of Office Depot, said: "We delivered strong operating results in the third quarter, despite the continued disruption related to the pending acquisition by Staples. We are working with the regulatory agencies to clear the pending acquisition by Staples, and expect to close the transaction in late 2015 or early 2016."

Net income attributable to Office Depot was $6 million or $0.01 per share compared to $29 million or $0.05 per share, last year.

Sales were $3.69 billion compared to $4.07 billion, a year ago. The company noted that planned store closures and foreign currency translation continue to be the primary causes of lower total company sales versus last year. Total adjusted sales declined 2% compared to the prior year period, excluding the impact of U.S. retail store closures, foreign currency translation, and sales from the company's interest in the Grupo OfficeMax joint venture which was sold in August 2014. Analysts expected revenue of $3.74 billion for the quarter.

Office Depot continues to expect total company sales in 2015 to be lower than 2014, primarily due to its decision to close certain stores, the negative impact of currency translation, business disruption from the announcement of the pending acquisition by Staples, and continued challenging market conditions in its industry. The company continues to execute on its U.S. retail store optimization plan, and expects to close approximately 180 stores in 2015 and more than 50 in 2016, for a total of at least 400 closures by the end of 2016.

On February 4, 2015, Office Depot and Staples announced that the companies entered into a definitive agreement under which Staples will acquire all of the outstanding shares of Office Depot. Office Depot said, in light of the timing agreement with the FTC and the Phase II review in Europe, the closing of the transaction could be delayed until early 2016.