Office Depot (NYSE:ODP) revealed a better-than-expected third-quarter profit over a year ago loss on tighter expenses and modestly higher North American sales, however shares still slipped on lower revenues.
The Boca Raton, Fla-based company posted net income of $54.3 million, or 18 cents a share, compared with a loss of $412.9 million, or $1.51 a share, in the same quarter last year.
The gain for the period ended Sept. 25 trumped the Streetâ€™s view of a 2-cent loss.
Revenue for the provider of office products was $2.9 billion, down 4% from $3 billion a year ago, narrowly missing average analyst estimates polled by Thomson Reuters of $2.95 billion.
â€śWe are pleased with our strong cash flow performance in the third-quarter which was driven by both earnings and good working capital management,â€ť said Mike Newman, Office Depotâ€™s chief financial officer. â€śWe have been executive very well across the entire enterprise as we focus on returning to sales growth and delivering improved profit as we go forward.â€ť
Earnings were boosted by lower expenses, down 8%, or $72 million, from the year-earlier, due to cost containing measures and lower professional fees.
While retail and business solutions sales in its North American division grew modestly, they were offset by a 10% decline in its international division, due to store closures in Japan and flat contract channel sales.
Just two days ago, Office Depot announced that its chief executive, Steve Odland, who has held the spot since 2005, has resigned from the company, effective Nov. 1. Neil R. Austrian, currently lead director, will serve as interim CEO while the board searches for a successor.
Odland will act as a consultant to the company through the end of this year to help smooth the transition.