Office Depot Cites Q1 Miss On Merger Complications With Staples, Says Decision Due By May 10

Shares of Office Depot Inc (NASDAQ: ODP) were trading lower by 0.6 percent Tuesday morning after the company reported first quarter results and provided an update on its pending merger with Staples, Inc. (NASDAQ: SPLS)

Office Depot said it earned $0.10 per share in the first quarter on revenue of $3.54 billion. Wall Street analysts were expecting the company to earn $0.12 per share on revenue of $3.62 billion.

Operating income for the quarter fell to $71 million from $88 million in the same quarter a year ago. Office Depot said special charges and credits comprised of $39 million in expenses related to the merger and also realized $5 million in restructuring activities.

"The protracted regulatory review of the pending Staples acquisition continues to have a substantial disruptive impact on our business," said Roland Smith, chairman and chief executive officer for Office Depot. "Our North American Business Solutions Division and International Division are more impacted by this disruption and accordingly, both failed to meet our sales and profit expectations this quarter. In spite of the uncertainty surrounding the acquisition, our associates around the world continue to demonstrate focus, drive and dedication as we finalize this process."

Smith also said he expects the U.S. federal district court to render a decision on the pending merger with Staples by May 10. He added, "we continue to believe that this transaction provides substantial benefits to our shareholders and all our customers."

Shares of Staples were trading higher by 0.6 percent Tuesday morning.

Image credit: Mike Kalasnik, Flickr