Office Depot (ODP) Q4 Results Described as 'Messy'; KeyBanc Comments
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Rating Summary:
3 Buy, 12 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 1 | Down: 2 | New: 2
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Office Depot (NYSE: ODP) declined after the company reported Q4 results. In the view of analyst Bradley B. Thomas of KeyBanc, the quarter was "messy."
"Office Depot, Inc. (ODP-NYSE) reported a messy 4Q, during which time ODP and OMX merged, making results a bit confusing. Adjusted 4Q EPS was a loss of $0.03, which includes a partial quarter for OMX. This is below our estimate of $0.01 and consensus of $0.03, although our estimate was for a full pro forma quarter from OMX. The range of estimates on the Street was $0.01-$0.06. The reported GAAP EPS of a loss of $0.34 includes a number of asset impairment charges as well as costs associated with the merger and restructuring," said Thomas.
"Total GAAP sales in 4Q13 increased 32.9%, which included sales from OMX since the merger closed on November 5, 2013. Excluding the two months of OMX results, sales declined 2.9%. This was better than our estimate of a 3.8% decline in core ODP. By segment, NA Retail sales grew 31.0% including OMX. Comps for core ODP retail declined 4.0% (which was in line with our estimate) due to lower average order value and lower transaction count (as a result of lower store traffic). Comps represented a deceleration on a one-, two-, and three-year rate, but this was not a surprise given the challenging holiday season that has been widely cited . . . ODP raised its synergy guidance to "more than $600 million", up from original company guidance of $400 million-$600 million and the updated November guidance of $500 million-$600 million. This still excludes benefits from rationalizing the retail store base, and no plans for retail restructuring have yet been announced," added the analyst.
KeyBanc has a Buy rating on Office Depot.
For an analyst ratings summary and ratings history on Office Depot (NYSE: ODP) click here. For more ratings news on Office Depot click here.
Shares of Office Depot closed at $5.35 yesterday.
"Office Depot, Inc. (ODP-NYSE) reported a messy 4Q, during which time ODP and OMX merged, making results a bit confusing. Adjusted 4Q EPS was a loss of $0.03, which includes a partial quarter for OMX. This is below our estimate of $0.01 and consensus of $0.03, although our estimate was for a full pro forma quarter from OMX. The range of estimates on the Street was $0.01-$0.06. The reported GAAP EPS of a loss of $0.34 includes a number of asset impairment charges as well as costs associated with the merger and restructuring," said Thomas.
"Total GAAP sales in 4Q13 increased 32.9%, which included sales from OMX since the merger closed on November 5, 2013. Excluding the two months of OMX results, sales declined 2.9%. This was better than our estimate of a 3.8% decline in core ODP. By segment, NA Retail sales grew 31.0% including OMX. Comps for core ODP retail declined 4.0% (which was in line with our estimate) due to lower average order value and lower transaction count (as a result of lower store traffic). Comps represented a deceleration on a one-, two-, and three-year rate, but this was not a surprise given the challenging holiday season that has been widely cited . . . ODP raised its synergy guidance to "more than $600 million", up from original company guidance of $400 million-$600 million and the updated November guidance of $500 million-$600 million. This still excludes benefits from rationalizing the retail store base, and no plans for retail restructuring have yet been announced," added the analyst.
KeyBanc has a Buy rating on Office Depot.
For an analyst ratings summary and ratings history on Office Depot (NYSE: ODP) click here. For more ratings news on Office Depot click here.
Shares of Office Depot closed at $5.35 yesterday.
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