Office Depot Inc. (NYSE:ODP) will announce first quarter 2014 results for the fiscal period ending March 29, 2014 on Tuesday, May 6, 2014. A conference call to discuss the results will be held that day at 9:00 a.m. Eastern Time.
Wall Street anticipates that the specialty-retailer will earn $0.03 per share for the quarter, which is $0.03 more than last year's breakeven quarter. iStock expects Office Depot to miss Wall Street's consensus number. The iEstimate is $0.02, a penny less than the current, consensus outlook.
Sales, unlike earnings, are expected to rise out-of-hand, but that's because of Office Depot and OfficeMax merger.
[Related -Office Depot Inc (NYSE:ODP): $20 Million Reasons To Consider]
Office Depot is a global supplier of office products and services. The Company operates in three business segments: North American Retail Division, North American Business Solutions Division and International Division.
On the doorstep of earnings, Goldman Sachs says, "Any benefits from the OfficeMax merger are likely to be tempered by organic revenue declines," and "This sector contends with a unique combination of structural pressures on its end market, as paper consumption and office supplies decline, and with competitive challenges associated with e-commerce."
Makes you wonder why iStock would even highlight the beleaguered company in a sector face first into headwinds? As iStock was screening companies set to announce their quarterly checkups, ODP triggered a flashback to an article we wrote: Office Depot Inc (NYSE:ODP): $20 Million Reasons To Consider.
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The story was primarily about Office Depot Director, Jeffrey C. Smith who purchased $20 million of ODP stock. At the time, four other insiders pulled out the debit card to buy the company stock too.
Intuitively, you have to wonder why anybody chalk up $20 million on a company they know intimately if the ship was about to sink deeper underwater – right? Tuesday morning's news might fill in some of the unknown as to why Mr. Smith felt compelled to buy ODP significantly higher than it is today?
Recent earnings history will have to change for Smith's investment to get back on-track as quarterly checkups have been unkind to ODP shareholders. The office supplies retailer has missed Wall Street's mark badly in four of the last seven quarters, averaging 72.23 less than forecasted. Meanwhile, EPS generated just one bullish surprise and two on-target results in last seven quarters.
As you might imagine, that track record wasn't good for stock-holders. ODP backpedaled by an average of 10.06% in the three days surrounding five of the last seven earnings announcements, while gaining 2.6 and 13.5% for the pair of green reactions.
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Overall: Wall Street appears to be betting against Office Depot Inc. (NYSE:ODP) as the company's short position increased by seven million shares in the last month. Meanwhile, Mr. Smith bet $20 million the other way. Although we don't know either way, but our gut tells us that ODP will show some Q1 improvement.
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