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 user 2008-04-30 at 2:49:54 pm Views: 53
  • #19735

    OfficeMax profit falls before gain; stock down
    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.