FRAMINGHAM (dpa-AFX) - Office Depot, Inc. (ODP), a provider of office products, which is in deal to be acquired by peer Staples, Inc. (SPLS), reported Tuesday that its first-quarter net income increased to $46 million from $45 million last year. Earnings per share were $0.08, same as last year.
Adjusted net income was $57 million or $0.10 per share, compared to adjusted net income of $71 million, or $0.13 per share a year ago. On average, 12 analysts polled by Thomson Reuters expected earnings of $0.12 per share for the quarter. Analysts' estimates typically exclude special items.
Total sales for the first quarter were $3.54 billion, down 9 percent from $3.88 billion in the first quarter of 2015. Analysts were looking for revenues of $3.62 billion.
Looking ahead, Office Depot said it continues to expect total company sales in 2016 to be lower than 2015, primarily due to the impact of store closures, the ongoing business disruption from the protracted regulatory approval process related to the pending acquisition by Staples, and continued challenging market conditions in industry.
The Company expects this disruption to continue through at least the first half of 2016, while it completes the ongoing litigation with the FTC and the additional requirements of the European and Canadian competition authorities.
Office Depot expects to generate approximately $500 million in adjusted operating income in fiscal 2016, with the year-over-year improvement occurring in the second half of the year.
Office Depot closed nine stores in the first quarter of 2016 as part of its previously announced U.S. retail store optimization plan. The Company continues to expect to close more than 50 stores during 2016 for a total of at least 400 closures under this plan.
Regarding the pending deal with Staples, Roland Smith, chairman and chief executive officer for Office Depot, said, 'we expect U.S. federal district court Judge Sullivan to render his decision by May 10, 2016.'
The company said the protracted regulatory review of the pending Staples acquisition continues to have a substantial disruptive impact on its business. North American Business Solutions Division and International Division are more impacted by this disruption.
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