Office Depot Hits Estimates in Solid Quarter

Seth Jayson, The Motley Fool
Updated

Office Depot (NYS: ODP) reported earnings on May 1. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Office Depot met expectations on revenues and earnings per share.

Compared to the prior-year quarter, revenue contracted and GAAP earnings per share increased.


Margins increased across the board.

Revenue details
Office Depot reported revenue of $2.87 billion. The 14 analysts polled by S&P Capital IQ wanted to see revenue of $2.89 billion on the same basis. GAAP reported sales were 3.4% lower than the prior-year quarter's $2.97 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.05. The 17 earnings estimates compiled by S&P Capital IQ forecast $0.05 per share. GAAP EPS were $0.14 for Q1 compared to -$0.05 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 30.7%, 120 basis points better than the prior-year quarter. Operating margin was 2.7%, 150 basis points better than the prior-year quarter. Net margin was 1.7%, 190 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.66 billion. On the bottom line, the average EPS estimate is -$0.03.

Next year's average estimate for revenue is $11.34 billion. The average EPS estimate is $0.07.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 484 members out of 620 rating the stock outperform, and 136 members rating it underperform. Among 168 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 129 give Office Depot a green thumbs-up, and 39 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Office Depot is hold, with an average price target of $3.71.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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