*NEWS*OFFICEMAX PROFIT FALLS BEFORE GAIN;STOCK DOWN

[Anonymous]

OfficeMax profit falls before gain; stock down
http://www.reuters.com/article/hotStocksNews/idUSN3042174720080430
NEW
YORK  – Office supply retailer OfficeMax Inc on Wednesday reported
lower first-quarter earnings before a one-time gain and said tough U.S.
economic conditions would persist through 2008, sending its shares down
more than 9 percent.

The company said sales, which had fallen in the last two quarters, also declined in April.
U.S.
office supply chains have been challenged in recent quarters as
small-business owners — their key customers — have cut back on
spending because of the nationwide housing meltdown and credit
crunch.OfficeMax’s net income increased to $63.3 million, or 81 cents
per share, from $58.5 million, or 76 cents per share, a year
earlier.The latest results included a gain of $20.5 million from the
company’s investment in Boise Cascade LLC.Excluding this and other
special items, earnings fell to 68 cents a share from 77 cents, missing
analysts’ forecasts by 1 cent, according to Reuters Estimates.

Sales
slipped to $2.3 billion from $2.44 billion. Analysts on average were
expecting $2.34 billion.”OfficeMax remains the cheapest stock in our
universe, but these dynamics in a very challenging macro environment
are likely to weigh on results for 2008, suggesting dead money in the
near-term,” Credit Suisse analyst Gary Balter said in a research
note.Balter, who has an “outperform” rating on the stock, also said
OfficeMax remained a buyout target.OfficeMax said sales in its contract
business fell 5.5 percent to $1.2 billion. Retail segment sales fell
5.5 percent as well, to $1.11 billion.The results came the day after
larger rival Office Depot Inc  reported sharply lower first-quarter
profit, citing the challenging economic environment. In March, top U.S.
office supply retailer Staples Inc cut its outlook for its fiscal year,
which began on February 3.OfficeMax stock, which has fallen more than
60 percent in the last year, was down $1.88, or 9.3 percent, at $18.32
in morning New York Stock Exchange trade.The shares were trading at
9.85 times 2008 earnings, compared with multiples of 12.5 for Office
Depot Inc and 14.92 for Staples.

[Author]

April 30, 2008 at 2:50 PM