Office Depot Vs. OfficeMax

Both Office Depot (ODP) and OfficeMax (OMX) reported earnings this morning, and it looks like both stocks are still in difficult times.

OfficeMax reported earnings of eight cents a share (after adjustments) which is a big tumble from the 36 cents a share it earned a year ago. Even worse for the company is that today’s earnings came in six cents below Wall Street’s estimate. As a result, the shares are getting a haircut this morning of about 5%.

The company added that it’s not very optimistic for the current quarter. OMX is expecting lower sales than a year ago and it plans to post a quarterly loss. I currently have the stock rated as a “buy,” although I may downgrade it soon due to the sluggish outlook.

Office Depot is also rated as a “buy,” but its earnings report is even rockier. The company reported another loss, and one that was wider than a year ago. The shortfall this time was for eight cents a share, and revenue declined by 17%. Business is clearly very weak for them. One piece of good news is that ODP beat Wall Street’s consensus of -10 cents a share, but a loss is still a loss.

I’ll probably update my ratings for the office suppliers once we have all the details next week.

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