A sizeable payout following a failed merger with its rival, Staples, pushed Office Depot to a second-quarter profit, but the office supply retailer still fell short of most expectations and revenue slid 6 percent.
Shares rose in morning trading after the company said it would close hundreds of additional stores.
Office Depot Inc., based in Boca Raton, Florida, earned $210 million, or 38 cents per share, compared with a loss of $58 million, or 11 cents per share, a year prior. Earnings, adjusted for non-recurring gains such as $187 million from the Staples payment, came to 3 cents per share.
The per-share earnings were half what was expected on Wall Street, according to a survey of industry analysts by Zacks Investment Research.
Revenue fell 6 percent to $3.22 billion. The company expects sales to continue falling as it closes stores.
Office Depot plans to close an additional 300 stores over the next three years. It's already closed 400 as the office supply industry reels from changing technology in the workplace, and online competition from places like Amazon.com.
The U.S. successfully blocked a proposed $6.3 billion merger between Office Depot and Staples. Though the companies challenged the U.S., in May, a federal judge supported the decision, saying that a tie-up between the remaining two office suppliers would throttle competition.
U.S. & World
Staples Inc., based in Framingham, Massachusetts, is the largest office-supply chain. Office Depot is No. 2.
Office Depot initiated a quarterly dividend of 2.5 cents per share and said it would repurchase up to $100 million in outstanding stock The company's shares rose 15 cents, or 4.7 percent, to $3.44 in morning trading. A year ago, they were trading at $7.90.