Shares of Office Depot Climb After Lifting Net Income Forecasts

Shares of Office Depot climbed Tuesday after the company said it expects greater benefits from its merger with OfficeMax and raised its net income forecasts. The Boca Raton, Florida, company now expects adjusted operating income of $255 million to $265 million in 2014. Its previous guidance called for at least $200 million in adjusted operating income. Office Depot expects its sales to decline in 2014, but says the benefits from its combination with OfficeMax will offset the impact of that decline. Office Depot and OfficeMax combined in a $1.2 billion deal in November 2013. The company expects $475 million in adjusted operating income in 2015, and $750 million in annual benefits from the tie-up by the end of 2016. It had expected about $700 million. Office Depot stock advanced $1.02, or 20.1%, to $6.09 in morning trading. Earlier the shares rose to $6.25, their highest price since May 2010. Office Depot reported net income of $29 million, or $0.05 per share, in the third quarter. Excluding one-time items the company said it earned $0.10 per share. Its revenue totaled $4.07 billion. Zacks Investment Research says analysts expected net income of $0.09 per share and $4.07 billion in revenue. Office Depot shares have fallen 4% since the beginning of the year. The stock has decreased 12% in the last 12 months.