Office Depot Inc.’s (ODP) shares surged over 9% after the company reported better-than-expected sales and earnings for the third quarter of 2018 and raised its guidance for the full year of 2018.
Total sales increased 10% to $2.9 billion from the same period last year, with increases in product and service revenues. Service revenues grew 124%, when including revenues from the CompuCom acquisition. Excluding CompuCom and other revenue recognition impacts, service revenue grew 17%.
Reported net income was $60 million, or $0.11 per share, compared to $92 million, or $0.18 per share, in the prior-year period. Adjusted EPS totaled $0.13, beating analysts’ estimates of $0.12.
In the Business Solutions Division, sales rose 6%, driven by acquisitions, eCommerce growth, and growth in adjacency products, core supplies and services. The segment also recorded increases in product sales and service revenues.
Office Depot posts Q2 earnings of 5 cents vs expectation of 3 cents
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The Retail Division posted a sales decline of 6% due to impacts from planned store closures and the adoption of a new revenue recognition standard. Product sales fell 7% while service revenues improved 11%. The CompuCom Division reported sales of $268 million in the quarter.
Office Depot raised its sales guidance for the full year of 2018 to $11 billion from the previous outlook of $10.8 billion. For the full year of 2019, the company expects sales of $11.1 billion.