OfficeMax profit soars 88% on stronger sales

Posted April 29, 2010 at 7:47 a.m.

ym-spending-1004.jpgAn Office Max employee fixes up the display of ink cartridges. (AP Photo/Paul Sakuma)

Associated Press | Stronger sales reflecting the stabilizing
economy helped lift OfficeMax Inc.’s first-quarter profit 88 percent,
the company said Thursday.

After paying preferred dividends, OfficeMax said profit available to
common shareholders rose to $24.8 million, or 29 cents per share, from
$13.1 million, or 17 cents per share, in the year-ago quarter.

Adjusted profit, which removes charges for severance and store closures in the U.S. and Mexico and a benefit related to tax distributions, came to 39 cents per share.

There were 11 percent more shares outstanding in the recent quarter, which has the effect of reducing earnings per share.

Revenue edged up to $1.92 billion from $1.91 billion a year ago.

Analysts surveyed by Thomson Reuters, on average, expected profit of 21 cents per share, on revenue of $1.9 billion. Analysts typically exclude one-time charges and gains from their estimates.

Sales in its contract segment rose 3.8 percent to $963 million, as international gains offset a decline in the U.S.

Retail sales declined 3 percent to $954.3 million. Sales at stores open at least a year fell 2.5 percent. The decrease was smaller than the 6.7 percent decrease reported in the December quarter. The company said the improvement reflected favorable sales trends in the U.S. and Mexico.

“We believe our results reflect some of the stabilization we are seeing in economic trends, but primarily are indicative of the traction we are gaining in our growth and profitability initiatives.” said Chairman and CEO Sam Duncan in a statement.

OfficeMax did not offer specific guidance, but said it expects sales will be higher in the second quarter than last year, when it posted $1.66 billion in sales. Adjusted operating income will gain, but not as much as it did in the first quarter, the company said.

Analysts expect second-quarter sales, on average, of $1.68 billion, with estimates ranging from $1.65 billion to $1.72 billion.

For the full year, OfficeMax expects total sales to be slightly higher than 2009’s $7.21 billion. Wall Street has forecast full-year sales of $7.31billion, with estimates ranging from $7.18billion to $7.45 billion.

The company closed seven stores during the quarter, ending the period with 1,003 retail stores, down from 1,020 a year ago.


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