WEST PALM BEACH, Fla. - Office Depot, the nation's second-biggest office supply chain, said Tuesday its first-quarter profit dropped 55 percent due to North American sales declines, but the results still topped Wall Street's expectations. Its shares rose more than 10 percent.
The Delray Beach, Fla.-based company said earnings dropped to $68.8 million, or 25 cents per share, compared with $153.8 million, or 55 cents per share, a year earlier.
Sales dipped 3 percent to $3.96 billion from $4.09 billion.
Excluding items, net income dropped to 29 cents per share from 59 cents per share.
Analysts surveyed by Thomson Financial forecast a profit of 22 cents per share on revenue of $4.07 billion.
Its shares rose $1.04, or 8.7 percent, to close at $13 Tuesday after rising as high as $13.85 earlier in the day. They are still well below their 52-week high of $36.84.
"Like you, we are not satisfied with the performance of the company or our share price," Steve Odland, the company's chief executive, said during a conference call.
However, he said: "We remain confident that we have a business model and plans to execute our key initiatives ... and continue to create value for our shareholders."
The office supply retailer has been hit hard by the sluggish economy and lagging housing markets in North America, where sales were down 7 percent to $1.7 billion.
Sluggish sales in Florida and California continued to hurt Office Depot's profit margin as small-business customers were affected by "difficult housing-related economic conditions," the company said in its earnings release.