Office Depot beats by $0.01, beats on revs; guides FY18 revs above consensus; guides FY19 revs above consensus (2.75)
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Reports Q3 (Sep) earnings of $0.13 per share, excluding non-recurring items, $0.01 better than the S&P Capital IQ Consensus of $0.12; revenues rose 10.2% year/year to $2.89 bln vs the $2.83 bln S&P Capital IQ Consensus.
- Product sales in the third quarter were up 1.1%, while service revenues grew 123.7%, driven primarily by the service revenues contributed by the CompuCom acquisition. Service revenue excluding the CompuCom division and revenue recognition impacts, grew 17% in the third quarter.
- Adjusted EBITDA, a primary measure in which the company measures operating performance, for the third quarter 2018 was $172 million compared to $167 million in the prior year period.
- Retail comps -5%
- Co issues upside guidance for FY18, sees FY18 revs of ~$11 bln vs. $10.92 bln S&P Capital IQ Consensus.
- Co issues upside guidance for FY19, sees FY19 revs of ~$11.1 bln vs. $10.79 bln S&P Capital IQ Consensus.
- Co states, "For 2018, we now expect to exceed our guidance for total sales, as well as reaffirm our guidance for adjusted operating income. Also, our operational discipline and focus on working capital initiatives have enabled us to generate $434 million in Free Cash Flow year to date, surpassing our guidance for the year. We now expect to approximate $450 million in Free Cash Flow by year end. We are also providing guidance for 2018 Adjusted EBITDA, an operating metric we watch closely and a measure our investors frequently request.