Shares of Office Depot (NASDAQ:ODP) were up 11% as of 3:45 p.m. EST Wednesday after the company announced strong fourth-quarter 2018 results.
More specifically, Office Depot's quarterly net sales climbed 3.4% year over year to $2.67 billion, translating to adjusted net income from continuing operations of $52 million, or $0.09 per share, up from $45 million, or $0.09 per share in the same year-ago period. Analysts, on average, were expecting lower earnings of $0.08 per share on slightly higher revenue of $2.68 billion.
Within Office Depot's top line, product sales fell 1% to $2.25 billion, while services revenue climbed 34% thanks to a combination of growth from the company's business services division and the partial inclusion of CompuCom divisional results in the segment. Excluding CompuCom, service revenue climbed 19%.
"In the pivotal year of our transformation, we achieved our key priorities of recapturing top-line growth, expanding our distribution platform, growing our services business, generating significant free cash flow, and strengthening our balance sheet," stated Office Depot CEO Gerry Smith.
For the full fiscal-year 2019, Office Depot reaffirmed its previous outlook for revenue to arrive at $11.1 billion (up from $11.0 billion in fiscal 2018) with adjusted EBITDA of $575 million (up from $567 million in fiscal 2018).
In the end, coupling that progress with Office Depot's modest bottom-line beat gave investors more than enough reason to optimistic for its future, and the stock is responding in kind.