Office Depot narrows 4Q loss, beats estimates

In this Dec. 20, 2010 photo, an Office Depot store, near New York's Times Square, is shown. Office supply retailer Office Depot Inc. said Tuesday, Feb. 22, 2011, that its fourth-quarter loss shrank by 25 percent. Not counting one-time charges, however, it beat Wall Street analysts’ expectations. (AP Photo/Richard Drew)
In this Dec. 20, 2010 photo, an Office Depot store, near New York's Times Square, is shown. Office supply retailer Office Depot Inc. said Tuesday, Feb. 22, 2011, that its fourth-quarter loss shrank by 25 percent. Not counting one-time charges, however, it beat Wall Street analysts’ expectations.

Office supply retailer Office Depot Inc. reported Tuesday a narrower fourth-quarter loss, and said it would have been profitable excluding one-time items.

The adjusted earnings beat Wall Street analysts' expectations.

The Boca Raton, Fla., company posted a net loss of $57.8 million, or 21 cents per share, after paying preferred dividends in the period ended Dec. 26, versus a year-earlier loss of $76.7 million, or 28 cents per share.

Excluding restructuring charges, the company said it earned 9 cents per share. Analysts polled by FactSet were expecting an adjusted loss of 3 cents per share in the most recent quarter.

Revenue fell 3 percent to $2.96 billion from $3.07 billion, matching analysts' expectations.

The stock fell 6 cents to $5.41 during in morning trading Tuesday.

During the quarter, the retailer began restructuring after a year of declining sales, a process that is expected to result in $170 million to $180 million in charges over the next three and a half years. By 2013, it expects to save between $180 million and $190 million per year.

Office Depot said its North American revenue slipped 2 percent, while revenue from stores open at least a year fell 1 percent. While the company saw an uptick in transactions, it generated less revenue as customers spent less. The company reported closing a net three stores during the quarter.

The retailer's business solutions division declined 3 percent. Internationally, revenue fell by a wider 5 percent. Office Depot its Japanese stores in 2009 and sold its Israeli business during the most recent quarter. Excluding currency fluctuations the negative impact of winding down these businesses, the company said its international sales rose for the first time since the second quarter of 2008.

Office Depot said last month that it plans to buy Swedish office supply company Svanstroms Gruppen in order to expand its European business. The company has not said when it expects the purchase to close, not what impact it might have on near-term earnings. The Swedish antitrust authority has yet to approve the acquisition.

For fiscal 2010, the company lost $2.2 million, or a penny per share, compared with a loss of $627 million, or $2.30 per share, in 2009. Annual revenue fell to $11.63 billion from $12.14 billion.