NEW YORK (TheStreet) -- Office Depot (ODP) shares are rocketing, up 18.4% to $4.93 on Tuesday, as investors have reacted positively to the company's announcement that it will close 400 stores.
The company expects to close 21% of its 1,900 U.S. stores by the end of 2016. Office Depot will close 150 by the end of this year, the majority of closings will come in the fourth quarter.
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The office supplies retailer acquired Office Max last year in a $1.2 billion deal.
The company beat analysts earnings estimates by 4 cents, posting 7 cents per diluted share for the quarter in the pre-market release of its earnings report today. Revenue was down 3% to $4.35 billion.
TheStreet Ratings team rates OFFICE DEPOT INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate OFFICE DEPOT INC (ODP) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow."