OfficeMax Beats on Earnings, Reinstates Dividend
OfficeMax Inc. (NYSE: OMX) reported second-quarter earnings per share (EPS) of $0.12 and $1.6 billion in revenue before markets opened this morning. EPS surpassed last year’s total of $0.07, and revenue declined from last year’s second-quarter total of $1.65 billion…
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OfficeMax reinstated a quarterly dividend of $0.02, with the first payment scheduled for August 31. The company suspended its dividend in the fourth quarter of 2008.
The office supply retailer expects third-quarter revenue to be flat or slightly higher than the same period a year ago, when revenue totaled $1.77 billion. OfficeMax also expects third-quarter adjusted operating income margin of 2.3%, in line with last year’s number. For the full-fiscal year, the company expects revenues in line with the 2011 total of $7.12 billion. That total includes an unfavorable impact from currency translation and excludes a comparison with the extra week of sales in 2011. The current consensus estimate for the third quarter calls for EPS of $0.24 on revenue of $1.79 billion. For the full fiscal year, the consensus estimate calls for EPS of $0.67 on revenue of $7.08 billion.
The company’s president and CEO had this to say:
As we gain traction in executing against our strategic plan, we are evaluating options for capital allocation to enhance shareholder value. As a first step, we are pleased to reinstate a quarterly dividend which reflects the progress we are making, and our confidence in the future of OfficeMax.
For the quarter, retail sales fell 5.7% compared with the same period a year ago. Same-store sales fell 1.85, which the company blamed on currency exchanges and fewer store transactions. Gross profits fell slightly to 29.5% and operating expenses rose slightly. In OfficeMax’s contract segment, sales fell 0.2%, primarily due to drop of 6% in international sales.
Shares are inactive in premarket trading this morning, but closed down 5.1% yesterday at $4.26. The current 52-week range is $3.90 to $8.82. Thomson Reuters had a consensus analyst price target of $7.50 before today’s results were announced.
Paul Ausick
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.