Office Depot reports 2nd quarter loss

Office Depot 2nd quarter loss matches expectations, revenue dips

Associated Press

BOCA RATON, Fla. (AP) -- Office supply retailer Office Depot Inc. said Tuesday that its second-quarter net loss stayed about the same because of costs related to its $1.2 billion proposed combination with its rival OfficeMax Inc. and sales remained sluggish.

The loss after paying preferred dividends for the three months ended June 29 totaled $64.4 million, or 23 cents per share. That compares with a loss of $64.3 million, or 23 cents per share, a year ago. Excluding one-time costs the loss was 10 cents per share, which matched analysts' expectations, according to FactSet.

Revenue fell 4 percent to $2.42 billion. Analysts expected $2.43 billion.

The company said weak demand for technology items like laptops, and budget pressure on its federal accounts, hurt revenue.

In its North American retail division revenue fell 5 percent to $939 million. Revenue in the 1,077 stores in that division open at least one year fell 4 percent, hurt by lower sales of mid-price laptops. That measure is a key gauge of a retailer's financial health, because it excludes stores that recently opened or closed.

Revenue from Office Depot's North American Business Solutions fell 2 percent to $781 million.

Office Depot and OfficeMax are working on integrating the companies and evaluating CEOs for the proposed combined company, which does not have a name or headquarters yet, while the companies await regulatory approval.

Office Depot's largest shareholder, Starboard Value LP, which holds a 14.8 percent stake, has been working to install a slate of six nominees on Office Depot's board, but Office Depot has said its own slate is more experienced.

Office Depot shares fell 2 cents to $4.25 in premarket trading.

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