DOW JONES NEWSWIRES
OfficeMax Inc. (OMX) on Thursday reported profits that handily
beat Wall Street expectations, thanks to improving margins that
more than offset a slight decline in revenue that fell slightly
short of views, but the office-supply chain cautioned the
macroeconomic environment looks to "remain muted" through the rest
of the year.
Rival Office Depot Inc. (ODP) on Wednesday reported a surprise
profit of its own, where analysts expected a loss, but its revenue
also fell a bit short. The results suggest the sector may not yet
have hit bottom but the companies are better managing their costs
in response.
Both chains are handing over the reins to new management, with
OfficeMax Chairman and Chief Executive Sam Duncan stepping aside
next month per a decision announced in February. Ravi Saligram,
formerly of food-service concern Aramark Corp., will become CEO and
OfficeMax director Rakesh Gangwal will become chairman.
Office Depot Chairman and CEO Steve Odland, who along with his
company recently settled alleged fair-disclosure violations with
the Securities and Exchange Commission, is leaving and a longtime
director will take the roles on an interim basis until a
replacement is found. Office Depot maintains the mutual parting of
the ways was unrelated to the SEC settlement.
OfficeMax reported net income attributable to common
shareholders of 23 cents a share, nearly triple the year-ago
quarter, on revenue of $1.81 billion, or 1% lower than the
prior-year period. Analysts polled by Thomson Reuters expected
earnings of 12 cents a share on revenue of $1.82 billion.
Gross profit increased at both its contract and retail
businesses, and total company adjusted operating income margin rose
to 2.3% from 1.5% a year ago.
OfficeMax shares were inactive in premarket trading, as were
those of Office Depot and industry leader Staples Inc. (SPLS).
-By Maxwell Murphy, Dow Jones Newswires; 212-416-2171;
maxwell.murphy@dowjones.com