Office Depot Inc. said its fourth-quarter earnings loss widened
sharply on expenses related to its recent merger with OfficeMax
Inc. and other items, as well as weaker margins.
The company in November completed its merger with rival
OfficeMax Inc. in a deal initially valued at $1.2 billion.
In addition to integration challenges, the new Office Depot also
must tackle broader industry challenges such as heightened
competition from online sellers and a shift in the use of office
technology that has put pressure on sales.
The latest quarterly results include OfficeMax's operations
since the closing of the merger on Nov. 5, which generated $939
million of sales.
"With our leadership team now in place, we have moved quickly to
establish a lean organizational structure with the best talent from
across the legacy businesses as well as adding new external
leadership," Chairman and Chief Executive Roland Smith said.
"We expect to complete a comprehensive reorganization of the
company by the end of February 2014," Mr. Smith said.
The company increased its cost-savings estimate related to the
merger to more than $600 million by the end of 2016.
Office Depot reported a loss of $120 million, or 34 cents a
share, compared with a year-earlier loss of $7 million, or six
cents a share. Excluding merger-related expenses, asset write-downs
and other items, the adjusted loss was three cents, compared with
year-earlier adjusted break-even results.
Total sales increased 33% to $3.49 billion but fell 2.9%
excluding contributions from OfficeMax.
Analysts polled by Thomson Reuters expected revenue of $4.03
billion.
Write to Tess Stynes at tess.stynes@wsj.com
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