NAPERVILLE, Ill. – Office-supply retailer OfficeMax Inc. said Thursday it moved to a third-quarter profit from a year-ago period weighed down by a massive write-down. But results missed analyst estimates, sending shares sharply lower in premarket activity.
The company said it earned $5.7 million, or 7 cents per share, in the three-month period ending Sept. 26. Excluding one-time items, earnings were 8 cents per share.
In the same quarter last year, the company posted a loss of $432.7 million, or $5.70 per share, including a $735.8 million non-cash impairment charge related to timber installment notes. Excluding that, earnings were 36 cents per share in the 2008 quarter.
Analysts polled by Thomson Reuters expected third-quarter income of 14 cents per share. Analyst estimates typically exclude one-time items.
Revenue fell nearly 13 percent to $1.8 billion, on par with analyst estimates.
Shares dived 73 cents, or 7.1 percent, to $9.50 in premarket activity. They have ranged from $1.86 to $14.50 over the past year.
OfficeMax, based in Naperville, Ill., said retail sales fell 11 percent to $932.3 million, as sales at stores open at least a year — a key retail metric — fell 11.5 percent.
The company said comparable sales for the quarter fell in all major product categories mainly due to weaker spending by consumers and small businesses. The company also said the influenza epidemic in Mexico and weak exchange rates there hurt performance.
Contract sales fell 14.3 percent to $899.6 million, as corporate accounts continued to limit spending.
The company said it remains "very cautious" for the fourth quarter, and expects will post a year-over-year sales decline. But it predicted fourth quarter sales will mark an improvement from the third quarter. The company expects to record an operating loss in the fourth quarter.
OfficeMax also said Thursday it plans to make a voluntary excess contribution of about $100 million in common stock to its qualified pension pans by the end of the year. The company said the net effect of the contribution on earnings per share is expected to be minimal in 2009 and accretive in 2010.
The company said as of late 2008, the pension plan was underfunded by $435 million, although a current estimate of plan assets — including the new contribution — will bring that figure to about $300 million.