RealMoney Silver - Sales Soft at Office Depot

Sales Soft at Office Depot
By TSC Staff
4/26/2007 10:46 AM EDT

Shares of Office Depot (ODP) took a hit Thursday after the office-products retailer posted weaker-than-expected first-quarter sales and warned of spending softness potentially continuing in the current period.

The stock recently was down $1.65, or 4.5%, to $34.85.

The company's earnings for the first quarter rose to $155.8 million, or 56 cents a share, from $129.5 million, or 43 cents a share, a year earlier.

Excluding charges, earnings per share rose 25% to 60 cents. Analysts polled by Thomson Financial expected earnings of 59 cents a share on this basis.

Revenue climbed 7% to $4.09 billion from $3.82 billion, but missed Wall Street's target of $4.16 billion.

Office Depot said that sales in North America, which were up 3%, were hurt early in the quarter by the launch of Microsoft's (MSFT) Vista operating system and a relative lack of available PC inventory. Softening spending by small-business customers hurt sales later in the quarter, the company said.

Office Depot also said that sales in second quarter may be similarly hurt if current business conditions persist.

Internationally, Office Depot's first-quarter sales jumped 21% in U.S. dollars.