Office Depot, OfficeMax Sales Drop

Office Depot Inc. (ODP) and rival OfficeMax Inc. (OMX) continued to post declining sales during their last quarter as independent concerns, underscoring the challenges the combined company will face as they contend with stiffer online competition.

The two firms, which won backing from the Federal Trade Commission to complete their $1.2 billion merger, unveiled their latest results on Tuesday, the same day they completed their deal to create a retailer with about $18 billion in annual sales.

The new company will use the name Office Depot Inc., and will trade on the New York Stock Exchange under the symbol ODP. A chief executive hasn't yet been named, so in the interim, Office Depot Chairman and Chief Executive Neil Austrian and OfficeMax President and CEO Ravi Saligram will serve together as co-CEOs. The company will continue to operate in both Florida and Illinois until a new CEO is picked and headquarters location is finalized.

But the latest results highlight the challenges the new company will face, as office-supplies sector has faced heightened competition from online sellers and a shift in the use of office technology that has put pressure on sales. Results for both firms mostly missed Wall Street's expectations.

Separately, Office Depot said five directors informed the company they would not seek to be appointed to the new board, while OfficeMax said two directors at its board won't seek appointments. Those departures are effective Tuesday.

Office Depot, the larger of the two firms, reported a third-quarter profit of $160.9 million, compared with a prior-year loss of $61.9 billion. On a per-share basis, which includes preferred stock dividends, profit in the latest period totaled 41 cents a share, compared with a loss of 25 cents last year.

Excluding a gain tied to the sale of the company's investment in a Mexican joint venture, as well as asset impairment charges and other items, adjusted profit fell to two cents a share from six cents. Revenue slid 2.7% to $2.62 billion.

Analysts surveyed by Thomson Reuters expected a profit of six cents on revenue of $2.6 billion.

Office Depot reported sales fell 4% at the company's North American retail stores, and dropped 2% for that region's business solutions unit. International sales slid 2%.

OfficeMax, meanwhile, posted a profit of $30.9 million, down sharply from $433.5 million last year. On a per-share basis, which includes preferred dividends, profit slid to 34 cents from $4.92 a share.

Excluding investment-related gains and a $670.8 million gain last year tied to the extinguishment of debt, as well as other items, adjusted profit slid to 15 cents from 25 cents a share last year. Revenue dropped 4.6% to $1.66 billion.

Wall Street analysts had expected 22 cents and $1.68 billion, respectively.

-Drew FitzGerald contributed to this article

Write to John Kell at [e-mail]

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