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Falling revenue did not prevent OfficeMax Incorporated (NYSE:OMX) from reporting a profit boost in the third quarter. OfficeMax provides office supplies and paper, print, and document services, technology products, and furniture to businesses, government offices, and consumers.
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OfficeMax Incorporated Earnings Cheat Sheet
Results: Net income for OfficeMax Incorporated rose to $433.5 million ($4.92 per share) vs. $22 million (25 cents per share) in the same quarter a year earlier. This marks a substantial increase from the year-earlier quarter.
Revenue: Fell 1.7% to $1.74 billion from the year-earlier quarter.
Actual vs. Wall St. Expectations: OfficeMax Incorporated reported adjusted net income of 27 cents per share. By that measure, the company beat the mean estimate of 26 cents per share. It fell short of the average revenue estimate of $1.87 billion.
Quoting Management: “Our team’s focus on strengthening the core business resulted in stronger operating margins for the quarter, driven primarily by our U.S. and international Contract businesses. While we continued to drive sales growth in our U.S. Contract business including digital initiatives, Retail sales were challenged by weaker demand for technology products, especially personal computers,” said Ravi Saligram, President and CEO of OfficeMax. “We are also pleased to have extinguished the Lehman non-recourse liability from our balance sheet.”
The company has now topped analyst estimates for the last four quarters. It beat the mark by 5 cents in the second quarter, by 7 cents in the first quarter, and by one cent in the fourth quarter of the last fiscal year.
Margins were up in the second quarter, following a drop in the previous quarter. Gross margin grew 0.5 percentage point from the year-earlier quarter to 26.4%. In the first quarter, the figure rose 0.2 percentage point to 25.6% from the year earlier quarter.
Revenue has declined for two quarters in a row. In the second quarter, revenue declined 2.7% to $1.6 billion from the year-earlier quarter.
Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the fourth quarter is 14 cents per share, up from 13 cents ninety days ago. The average estimate for the fiscal year is 75 cents per share, a rise from 73 cents ninety days ago.
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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
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