Office Depot (ODP) Reports In-Line Q2 EPS

Office Depot (NASDAQ: ODP) reported Q2 EPS of $0.06, in-line with the analyst estimate of $0.06. Revenue for the quarter came in at $3.44 billion versus the consensus estimate of $3.5 billion.

Outlook

Office Depot continues to expect total company sales in 2015 to be lower than 2014, primarily due to its decision to close certain stores, the negative impact of currency translation, business disruption from the announcement of the pending acquisition by Staples, and continued challenging market conditions in our industry.

In 2015, total company capital expenditures are expected to be approximately $200 million, and total company depreciation and amortization is expected to be approximately $300 million.

With respect to the OfficeMax merger:

Also, the company expects the European restructuring plan to generate annualized cost reduction benefits of approximately $80 million by the end of 2016, based on current exchange rates (no change to the original estimated benefit in local currencies that was initially communicated in October 2014). Restructuring charges are expected to be approximately $80 million in 2015, consisting of severance pay and other employee termination benefits as well as lease obligation and other costs.

Additionally, the company estimates it will incur approximately $100 million of expenses related to the pending acquisition by Staples, primarily consisting of employee retention costs and advisory fees, $49 million of which were incurred in the first half of 2015.

For earnings history and earnings-related data on Office Depot (ODP) click here.

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