OfficeMax 4th-quarter profit tumbles

OfficeMax 4th quarter net income falls on charges, adjusted earnings beat Street view

Associated Press

NAPERVILLE, Ill. (AP) -- OfficeMax Inc. said Thursday that its fiscal fourth-quarter profit fell 76 percent on weak sales growth and a variety of asset impairment and severance charges.

Its adjusted earnings and its revenue topped Wall Street estimates, however, and its shares rose more than 6 percent in midday trading.

Office suppliers have suffered as consumers and small businesses order fewer office supplies or search online for the cheapest option.

"Sales trends improved in the fourth quarter but remain soft," CFO Bruce Besanko said in a statement. "Consequently, we will continue to streamline our cost structure, enabling us to make strategic investments in initiatives that will jump start growth."

OfficeMax said in November it was looking at variety of strategic retail partnership possibilities. In a deal with RadioShack, RadioShack employees are selling mobile phones and other items in some OfficeMax stores.

Net income fell 76 percent to $2.9 million, or 3 cents per share, from $12.1 million, or 14 cents per share last year. Excluding one-time items such as asset impairment and severance costs, it earned 17 cents per share. Analysts expected adjusted earnings of 15 cents per share, according to FactSet.

Revenue rose 3.9 percent to $1.84 billion from $1.77 billion last year. Analysts expected revenue of $1.81 billion. Revenue from stores open at least one year edged up 0.2 percent.

For the year, net income fell 51 percent to $34.9 million, or 38 cents per share, from $71.2 million, or 79 cents per share. last year. Revenue was nearly flat at $7.12 billion.

The Naperville, Ill.-based company expects sales to be flat in the first quarter and flat to slightly up in the full year.

Its shares rose 35 cents, or 6.3 percent, to $5.87 in midday trading. Its shares are down almost 60 percent from their 52-week high of $14.36 in early April. But they have risen from a low for the year of $3.90 in early October.

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