Office Depot (NYSE:ODP) said its chief executive will step down next month and reported preliminary third-quarter earnings that beat Wall Street expectations, sending shares up nearly 7%.
Steve Odland, who last week settled improper disclosure charges with U.S. regulators, will step down on Nov. 1 and be replaced on an interim basis by a company director.
Office Depot, which is expected to report full results on Wednesday, expects to report sales of $2.9 billion for the quarter, ended on Sept. 25, down 4% from a year earlier.
The office supplies retailer expects to report net income of $54 million, or 18 cents per share, compared with a year-earlier loss of $413 million, or $1.51 per share, a year earlier.
Analysts on average are expected a loss of 3 cents per share on sales of $2.95 billion, according to Thomson Reuters.
Odland, who has been CEO since 2005, will stay on until Dec. 31 as a consultant during the transition.
Last week, Odland, the company and a former Office Depot executive said they will collectively pay more than $1 million to settle U.S. Securities and Exchange Commission charges of improper disclosures.
The SEC accused the company, Odland and former Chief Financial Officer Patricia McKay of conveying to analysts and big investors that the company would not meet analysts' earnings estimates for the second quarter of 2007.
According to the SEC, company executives discussed how to encourage analysts to revisit their second-quarter forecasts.
The office supplier then signaled to analysts it would not meet expectations and analysts lowered their estimates.
Neil Austrian, an Office Depot director since 1998, will act as interim chairman and CEO while Office Depot looks for a new chief.
Austrian previously served as an interim CEO at Office Depot from late 2004 until March 2005.
Office Depot shares were up about 7%. at $4.95 in premarket trading. Shares have fallen by nearly half since hitting a 52-week high in late April.