Office Depot misses profit expectations; initiates dividend and boosts stock buyback program

Office Depot Inc. reported Wednesday that it swung to a profit of $210 million, or 38 cents a share, from a loss of $58 million, or 11 cents a share, in the same period a year ago. Excluding non-recurring items, such as a fee received in connection with the termination of the Staples merger, adjusted earnings per share came to 3 cents, below the FactSet consensus of 6 cents. Revenue slipped to $3.22 billion from $3.44 billion, but beat the FactSet consensus of $3.20 billion. The office products retailer said it will initiate a quarterly dividend of 2.5 cents a share, payable Sept. 15 to shareholders of record Aug. 25. The company raised its stock buyback program to $250 million from $100 million. Office Depot also announced a 3-year plan to grow profitability, which will include additional store closures and cost cutting measures. The stock, which was still inactive in premarket trade, has plunged 42% year to date, while the S&P 500 has gained 5.5%.

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