Office Depot Profit Down 20% in 2nd Quarter

Office Depot Inc. said its second-quarter profit fell more than 20% to $57.9 million, or 19 cents a share, and warned that its full-year earnings would fall short of earlier estimates. The quarterly earnings, which were in line with Wall Street’s lowered expectations, were hampered by softer-than-expected May and June sales and weak currencies in foreign countries where it does business, the office-supplies retailer said. Sales rose 12% to $2.6 billion, while sales at stores open at least a year were up 9%. The Delray Beach, Fla.-based company also said it expects earnings for 2000 to come in the range of 80 cents to 82 cents a share, well below analysts’ current consensus estimate of 93 cents, as sales of lower-margin technology products continue to outpace sales of basic office supplies and squeeze gross profit margins. Before the announcement, shares of Office Depot closed off 38 cents at $6.63 on the NYSE.